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REPORT TO THE 2007 GENERAL ASSEMBLY
Co- Chair s:
Senator Mart in Nesbitt
Representative Ver la Insko
JOINT LEGISLATIVE OVERSIGHT COMMITTEE
ON MENTAL HEALTH, DEVELOPMENTAL
DISABILITIES, AND SUBSTANCE ABUSE SERVICES
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TABLE OF CONTENTS
Letter of Transmittal ................................................................................................... 5
Joint Legislative Oversight Committee on Mental Health Developmental
Disabilities and Substance Abuse Services Membership.................................. 7
Preface........................................................................................................................ .. 9
Committee Proceedings ........................................................................................... 10
Committee Findings ................................................................................................. 16
Committee Conclusions ........................................................................................... 26
Legislative Proposal # 1: Build Community Infrastructure ............................... 27
Legislative Proposal # 2: Uniform Sliding Fee Schedule .................................... 47
Legislative Proposal # 3: Extent Pilot/ Clarify LME Functions.......................... 51
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JOINT LEGISLATIVE OVERISGHT COMMITTEE ONMENTAL HEALTH,
DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES
State Legislative Building
Raleigh, North Carolina 27603
Senator Martin Nesbitt, Co- Chair Representative Verla Insko, Co- Chair
MARCH 7, 2007
TO THE MEMBERS OF THE 2007 GENERAL ASSEMBLY ( 2007 Regular Session):
The Joint Legislative Oversight Committee on Mental Health, Developmental
Disabilities and Substance Abuse Services submits to you for your consideration
its report pursuant to G. S. 120- 231.
Respectfully Submitted,
_______________________________
Rep. Verla Insko, Co- Chair
_______________________________
Sen. Martin Nesbitt, Co- Chair
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JOINT LEGISLATIVE OVERSIGHT COMMITTEE ON MENTAL HEALTH,
DEVELOPMENTAL DISABILITIES AND SUBSTANCE ABUSE SERVICES
2005- 2006 MEMBERSHIP LIST
Senator Martin Nesbitt – Co- Chair
300- B Legislative Office Building
Raleigh, NC 27603
O: 715- 3001 Email: Martinn@ ncleg. net
Representative Verla Insko – Co- Chair
2121 Legislative Building
Raleigh, NC 27601
O: 733- 7208 Email: Verlai@ ncleg. net
Senator Austin Allran
516 Legislative Office Building
Raleigh, NC 27603
O: 733- 5876 Email: Austina@ ncleg. net
Representative Martha Alexander
2208 Legislative Building
Raleigh, NC 27601
O: 733- 5807 Email: Marthaa@ ncleg. net
Senator Janet Cowell
1028 Legislative Building
Raleigh, NC 27601
O: 715- 6400 Email: Janetc@ ncleg. net
Representative Jeffrey Barnhart
608 Legislative Office Building
Raleigh, NC 27601
O: 715- 2009 Email: Jeffreyba@ ncmail. net
Senator Charlie Dannelly
2010 Legislative Building
Raleigh, NC 27601
O: 733- 5955 Email: Charlied@ ncleg. net
Representative Beverly Earle
634 Legislative Office Building
Raleigh, NC 27603
O: 715- 2530 Email: Beverlye@ ncleg. net
Senator James Forrester
1129 Legislative Building
Raleigh, NC 27601
O: 715- 3050 Email: Jamesf@ ncleg. net
Representative Bob England
2219 Legislative Building
Raleigh, NC 27601
O: 733- 5749 Email: Bobe@ ncmail. net
Senator Jeanne Lucas
300- G Legislative Office Building
Raleigh, NC 27603
O: 733- 4599 Email: Jeannel@ ncleg. net
Rep. Jean Farmer- Butterfield - Adv. Member
611 Legislative Office Building
Raleigh, NC 27603
O: 733- 5898 Email: Jeanf@ ncleg. net
Senator Vernon Malone
2113 Legislative Building
Raleigh, NC 27601
O: 733- 5880 Email: Vernonm@ ncleg. net
Representative Carolyn Justice
301C Legislative Office Building
Raleigh, NC 27603
O: 715- 9664 Email: Carolynju@ ncleg. net
Senator William Purcell
625 Legislative Office Building
Raleigh, NC 27603
O: 733- 5953 Email: Williamp@ ncleg. net
Representative Edd Nye
639 Legislative Office Building
Raleigh, NC 27603
O: 733- 5477 Email: Eddn@ ncleg. net
Senator Larry Shaw – Advisory Member
621 Legislative Office Building
Raleigh, NC 27603
O: 733- 9349 Email: Larrys@ ncleg. net
Rep. Earline Parmon – Adivsory Member
632 Legislative Office Building
Raleigh, NC 27603
O: 733- 5829 Email: Earlinep@ ncleg. net
Representative Fred Steen
514 Legislative Office Building
Raleigh, NC 27603
O: 733- 5881 Email: Fredst@ ncmail. net
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STAFF TO LOC
Kory Goldsmith, Research Division
O: 733- 2578
Email: koryg@ ncleg. net
Shawn Parker, Research Division
O: 733- 2578
Email: shawnp@ ncleg. net
Rennie Hobby, Committee Assistant
O: 733- 5639
Email: mentalhealthca@ ncleg. net
Ben Popkin, Research Division
O: 733- 2578
Email: benp@ ncleg. net
Andrea Russo- Poole, Fiscal Research
O: 733- 4910
Email: andrear@ ncleg. net
Natalie Towns, Fiscal Research
O: 733- 4910
Email: nataliet@ ncleg. net
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PREFACE
The Joint Legislative Oversight Committee on Mental Health, Developmental
Disabilities, and Substance Abuse Services ( LOC) is established in Article 27 of
Chapter 120 of the General Statutes. The LOC is charged with examining, on a
continual basis, the system- wide issues affecting the development, financing,
administration, and delivery of mental health, developmental disabilities, and
substance abuse services, including issues related to governance, accountability
and quality of services.
The LOC consists of sixteen members, eight appointed by the President Pro
Tempore of the Senate and eight appointed by the Speaker of the House of
Representatives. The members appointed by the President Pro Tempore must
include all of the following: at least two must be members of the Senate
Committee on Appropriations, the chair of the Senate Appropriations Committee
on Human Resources, and at least two must be of the minority party. The
members appointed by the Speaker of the House of Representatives must include
all of the following: at least two members of the House Committee on
Appropriations, the cochairs of the House of Representatives Appropriations
Subcommittee on Health and Human Services, and at least two members of the
minority party.
The co- chairs for the 2005- 2006 Session are Senator Martin Nesbitt and
Representative Verla Insko.
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COMMITTEE PROCEEDINGS
LEGISLATIVE OVERSIGHT COMMITTEE
The Joint Legislative Oversight Committee on Mental Health, Developmental
Disabilities, and Substance Abuse Services ( LOC) met on six occasions during the
2006- 2007 interim. The LOC also met four times in two days during the 2007
Regular Session. The following is a brief summary of the Committee's
proceedings. Detailed minutes and information from each Committee meeting
are available in the Legislative Library.
September 6, 2006
The LOC convened its first meeting on Wednesday, September 6, 2006, at 9: 30
A. M. in Room 643 of the Legislative Office Building. At this meeting, the LOC
heard several updates concerning legislative actions of interest and the proposed
LOC work schedule for the coming interim.
The meeting began with a review of legislative actions from the 2006 Session.
Andrea Russo, Fiscal Research, provided a description of budget actions and
noted $ 95.8 million dollars was appropriated for the 2006- 2007 fiscal year for
mental health, developmental disabilities, and substance abuse services. Shawn
Parker, Research Division, reviewed procedural and policy changes enacted in
H. B. 2077, Mental Health Reform Changes ( S. L. 2006- 142 ), H. B. 2120, Strengthen
LOC Oversight Role ( S. L. 2006- 32), and S. B. 1741 ( S. L. 2006- 66), Modify
Appropriations Act of 2005.
Leza Wainwright, Deputy Director of the Division of Mental Health,
Developmental Disabilities and Substance Abuse Services ( DMH), discussed
how funds appropriated for the 2006- 2007 fiscal year would be allocated to
community programs. In response to concerns over the disproportionate
funding between area programs, Ms. Wainwright indicated results of the
Funding Equity Study would be ready in a future meeting. Ms. Wainwright
continued her presentation by explaining the role of the two consultants
authorized by legislation. The first would assist DHHS and the LMEs with crisis
planning and the second would help with State- level strategic planning and
technical assistance to the LMEs. She also noted that the report on how Mental
Health Trust Fund dollars would be spent would be ready to present at the
October 6th meeting.
Ms. Wainwright outlined how DHHS planned to accomplish tasks assigned by
the Legislature during the last session. She noted that the total number of
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individuals served in State Hospitals and in the community had increased
significantly and was asked to provide a statewide count. Ms. Wainwright also
addressed the concerns of sheriffs departments regarding confusion in knowing
where to take a person in need of help as well as issues regarding mentally ill
people in adult care facilities.
Terry Hatcher, Director, Office of Property and Construction for the
Department of Health and Human Services ( DHHS), gave an update on the
status of capital projects related to the Developmental Centers, the replacement
of the Cherry and Broughton psychiatric hospitals, and the funding for each
project.
Tara Larson, Assistant Director of Clinical Policy, Division of Medical
Assistance ( DMA), discussed the transition to Value Options and several factors
contributing to the delay in authorization performing utilization review ( UR) for
Medicaid services. Ms. Larson also explained that DMA monitoring of Value
Options began on June 1 and identified problem areas and preliminary actions
taken to ensure services would not be disrupted.
Kory Goldsmith, Research Division, reviewed the LOC work plan proposed by
the co- chairs for the interim. The work plan covered studying: LME funding
allocations, Services Gap and other LME issues. The goal was to review all the
topics and make recommendations to the 2007 General Assembly.
Representative Insko explained that she and Representative Earle had met
with DHHS to discuss a report that had been submitted to the Commission on
Aging on mentally ill residents in Adult Care Homes. It was suggested that a
joint subcommittee of the Commission on Aging and the LOC look into the
needs of those residents and services offered to mentally ill people in adult care
facilities.
Vivian Leon, Mental Health Program Manager with the Best Practice Team,
gave an in- depth description of services and supports for the developmentally
disabled.
October 4, 2006
The LOC held its second meeting on Wednesday, October 4, 2006, at 9: 30 A. M.
in Room 643 of the Legislative Office Building.
Kory Goldsmith, Research Division, provided a review of legislation requiring
DMH to study the long- term plan for meeting the mental health, developmental
disabilities, and substance abuse services needs.
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Steve Hairston, Section Chief for Operations Support, DMH, introduced
consultant Dr. Christina Thompson, Heart of the Matter Consulting, Inc., who
presented the preliminary report on the Long Range Study for MHDDSAS and
Service Gaps.
Dr. Thompson explained how the statistical models were created and
reviewed some of the components used in the model. Dr. Thompson also
provided a preliminary estimate that it would cost $ 500,000,000 to bring North
Carolina up to the national average over a five year period of time.
Committee staff Kory Goldsmith and Andrea Russo reviewed follow- up
questions from the September meeting.
Dr. Bonnie Morell, Team Leader for the Best Practice Team, DMH, presented
an in- depth description of services for the mentally ill.
Secretary Carmen Hooker Odom, DHHS, addressed the LOC to provide
information relating to a shortfall in LME administration funds for fiscal year
2006- 07. The Secretary indicated that the new cost model would produce an
adequate and appropriate calculation of the amount needed to fund the LME
administrative functions.
Leza Wainwright, Deputy Director, DMH, identified eight areas of service
funding that would be cut to make up the shortfall in LME administrative
funding. Ms. Wainwright also provided the LOC with the proposed spending
allocations from the Mental Health Trust Fund.
November 13, 2006
The LOC convened its third meeting on Monday, November 13, 2006, at 9: 30
A. M. in Room 643 of the Legislative Office Building.
Leza Wainwright, Deputy Director, DMH, provided the LOC with information
regarding the revised cost model for payment of LME administrative functions.
Ms. Wainwright also provided a preliminary report on the Funding Allocation
Study. Ms. Wainwright described sources of funding and went on to state that
the consultants would present the Finance cost model to the LOC at the
December meeting. She said that DMH and the consultants would work with the
North Carolina Association of County Commissioners and the North Carolina
Council of Community Programs on recommendations related to the finance
model and that, following approval of the model, implementation would begin
on July 1, 2007.
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The audience was recognized for comments regarding a technical amendment
to the Medicaid State Plan. Tara Larson, Assistant Director for Clinical Policy,
DMA, said that Value Options would not implement the amendment until
February 1, 2007.
Patricia Amend, Director of Policy, Planning, and Technology with the North
Carolina Housing Finance Agency ( NCHFA) and Julia Bick, Housing
Coordinator, DHHS, provided an update on the Housing 400 Initiative. The
Housing 400 Initiative will be delivered through three programs; the Supportive
Housing Development Program 400, the Preservation Loan Program 400, and the
Housing Credit Program.
Flo Stein, Chief, Community Policy Program, DMH, offered an in- depth
description of substance abuse services.
Kory Goldsmith, Research Division, offered follow- up information from
previous meetings.
December 6, 2006
The LOC met for the fourth time on Wednesday, December 6, 2006, at 9: 45
A. M. in Room 643 of the Legislative Office Building.
Senator Nesbitt announced that the Service Gaps Study and the Funding
Allocation Study would not be heard by the LOC on that day, but the co- chairs
and staff would receive the reports on December 15, 2006. Leza Wainwright,
Deputy Director, DMH, stated that some of the reports conclusions were based
on faulty data and needed review. Many LOC members expressed serious
concerns about the failure of DMH to provide the report. Mike Moseley,
Director, DMH, explained that certain items were contracted out because the
DMH did not have the capacity to do the work internally, but it was incumbent
upon the Division that the product be accurate.
Ms. Wainwright described DMH s progress on tasks outlined in legislation
during the 2006 Session and made clarifications with regard to administrative
costs for the LMEs.
Dr. Bert Bennett, Program Manager for the Best Practice Team, DMH,
delivered a report on the First Level Commitment Pilot Program. The report
recommended that the program be expanded statewide.
The LOC then received comments from the audience including several sheriffs.
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January 10, 2007
The LOC met on Wednesday, January 10, 2007, at 9: 30 A. M. in Room 643 of the
Legislative Office Building.
Dr. Allen Dobson, Assistant Secretary for Health Policy and Medical
Assistance, DHHS, gave an update on the technical amendment to the CAP-MR/
DD waiver and discussed a data exchange pilot program which has enabled
three participating LMEs to access the Medicaid database to track what is
happening with consumers.
Jeff Weaver, General Assembly Chief of Police, addressed the building
evacuation policy.
Representative Insko took a moment to recognize the passing of
Representative Howard Hunter and Senator Robert Holloman.
Eddie Caldwell, Executive Vice President and General Counsel to the N. C.
Sheriffs Association, offered information regarding mental health services
available for pre- trial detainees in county jails.
Kory Goldsmith, Research Division, reviewed the study provisions related to
the consultant s reports.
Dr. Christine Thompson, Heart of the Matter Consulting, Inc., gave her
presentation on the final report for the Long Range Plan and Gaps Analysis.
It was suggested that the Funding Allocation Report be presented at the next
meeting to allow staff ample time to review the report and to allow further
questioning of the Gaps Study Report by the committee.
Dr. Thompson reviewed estimates of funding resources based on
recommendations made in the report and stated that the collective impact of the
proposed increases would cost $ 2.7 billion over a 5 year period.
Andrea Russo- Poole, Fiscal Research, offered follow- up information from
previous meetings.
The LOC then received comments from the audience.
January 16, 2007
The LOC met on Wednesday, January 16, 2007, at 1: 30 P. M. in Room 643 of
the Legislative Office Building.
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Leza Wainwright, Deputy Director, DMH gave a brief overview of the
Funding Allocation Model. Ms. Wainwright then gave several financing
recommendations which included: 1) Expand Medicaid eligibility; 2) Pursue
Medicaid waivers; 3) Increase cost sharing under Medicaid; 4) Standardize first
party payments and third party collection protocols
Senator Nesbitt then recognized LOC staff, who recommended that because
neither DMH nor the consultant had provided a methodology for the models,
and because the models had produced some unexpected results, the LOC should
retain an independent party to forensically deconstruct the models in order to
understand the methodology and to verify the models accuracy.
LOC staff then reviewed possible options for legislation. Committee members
discussed each of the seventeen options and offered feedback. The co- chairs
directed staff to go back and craft proposals based on the discussions. Senator
Nesbitt suggested that the size and speed of building the new State hospitals also
be considered.
Senator Nesbitt stated that the LOC would hold a final meeting after session
started to review and approve the final report.
March 6- 7, 2007
The LOC met on Tuesday, March 6, 2007, at 6: 00 P. M. in Room 643 of the
Legislative Office Building. Committee staff began a review of the Committee's
draft report. Because of the late hour, the LOC adjourned until the following day.
The LOC met at 10: 00 A. M., 1: 00 P. M., and 5: 00 P. M. on Wednesday, March 7,
2007. Staff completed a review of the draft report and the LOC voted on eight
proposed amendments. The LOC then approved the report.
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COMMITTEE FINDINGS
Introduction
In 2001, the General Assembly adopted significant reform legislation to
restructure the delivery of services to individuals with mental illnesses,
developmental disabilities, and substance abuse disorders. The foundations of
reform included: local management of the system, decreased reliance on State
institutions, community- based best practice treatments, increased consumer
involvement, access to multiple and qualified providers, and performance and
fiscal accountability to the State and local governments. As part of the
legislation, the General Assembly directed the Secretary of DHHS ( Secretary)
and the Division of Mental Health, Developmental Disabilities, and Substance
Abuse Services ( Division) to undertake administering system reform. The
reform has been overseen by the General Assembly and the Joint Legislative
Oversight Committee on Mental Health, Developmental Disabilities, and
Substance Abuse Services ( LOC).
During the 2005- 2006 interim, the LOC examined the status of services, the
strength of State leadership, and the role of local agencies ( LMEs). It found that
mental health and substance abuse services are substantially under- funded when
compared to other states. It also found that reform was moving away from
strong local management. In response to these findings, the LOC recommended
and the 2006 Session of the General Assembly approved significant increases in
funding and modifications to the reform laws. The following is a summary of
those changes:
1. The General Assembly appropriated $ 95.8 million in additional funding
for mental health, developmental disabilities, and substance abuse services and
authorized $ 328.3 million in certificates of participation for the construction of
new psychiatric hospitals in Goldsboro and Morganton and to complete
construction of the new facility in Butner. Major areas funded included:
o Developmental Therapies - $ 26 million recurring to replace services to
the developmentally disabled lost due to changes in federal policy and
cuts in federal support.
o Community- Based Services - $ 21.4 million recurring for mental health,
substance abuse, and crisis services.
o Housing - $ 10.9 million in non- recurring funds for the North Carolina
Housing Trust Fund and $ 1.2 million in recurring funds for operating
assistance for 400 new apartments.
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o Mental Health Trust Fund - $ 14.39 million in non- recurring funds.
2. The General Assembly also enacted laws to clarify the role of LMEs,
increase the qualifications for LME directors and finance officers, strengthen
local governing boards, codify the roles of consumer and family advisory
committees, and require that the Secretary develop State and local performance
measures.
Despite the gains made during the 2006 Session, the system continues to face
significant challenges. The ability of LMEs to manage publicly funded services
continues to be compromised by policy decisions made at the departmental level.
The State psychiatric hospitals are experiencing record admission rates while at
the same time keeping individuals for shorter and shorter periods of time.
Communities are struggling to develop crisis services, including in- patient
hospitalization. The continued lack of appropriate and affordable housing
impacts all disability groups, making it very difficult for individuals to leave
institutions and live and work in their communities.
1. Start- up Funding for Substance Abuse Treatment Programs
A 2003- 2004 National Survey on Drug Use and health conducted by SAMHSA
( U. S. Substance Abuse and Mental Health Administration) estimated that 2.59%
of North Carolina s population needed, but did not receive, treatment for illicit
drug use. An estimated 5.09% needed, but did not receive, treatment for alcohol
use. Using North Carolina population estimates, this means that approximately
220,000 people were lacking treatment for illicit drug use and approximately
475,000 lacked treatment for alcohol use.
In 2005, almost twenty percent ( 20%) of persons admitted to the State
psychiatric hospitals had a primary diagnosis of drug or alcohol abuse. The
median length of stay for these individuals ranged from three to six ( 3- 6) days.
Most substance abuse consumers are not Medicaid eligible, meaning indigent
persons must rely upon State funds to pay for services. To achieve the national
average per capita funding in FY2007- 08 for substance abuse services, DMH
estimates it would cost over thirty- five million dollars ($ 35,000,000).
It is widely acknowledged that to be effective, substance abuse treatment must
be available when the consumer is willing to accept it. This means the provider
must be able to respond to consumer needs twenty- four hours a day, seven days
a week, 365 days a year. This is sometimes referred to as the fire house model.
However, under the current funding system, providers only receive payment
upon actually rending a service to an individual consumer. This is sometimes
17
referred to as the fee for service model. The fee for service payment system
does not lend itself to the fire house model of service delivery.
2. Additional Housing Assistance
Lack of affordable housing options continues to be sited as one of the major
barriers to successfully treating individuals in the community. However, in
2006, the LOC recommended, and the General Assembly funded, the Housing
400 Initiative. This initiative appropriated $ 1.2 million ( recurring) for operating
assistance of 400 independent- and supportive- living apartments and also
appropriated $ 10.94 million ( non- recurring) for financing the apartments. The
North Carolina Housing Finance Agency and the Department of Health and
Human Services are jointly operating this initiative.
3. Support Proposals Regarding Mentally Ill in Adult Care Homes
Currently there is no level of care between the hospital inpatient setting and
the adult care home setting, and there is a lack of options for independent living.
In 2005, the public mental health system served over 174,000 adults with
mental illness, 1,149 of whom lived in licensed mental health homes and 5,000 of
whom lived in adult care homes. Nationally, approximately 10% of adults with
serious mental illness need specialized housing. It was reported that over 40% of
the adult care home population carries an active diagnosis of mental illness.
The co- chairs of the Study Commission on Aging and the LOC determined it
would be beneficial to appoint a joint, ad hoc subcommittee to study issues
relating to serving mentally ill individuals who reside in long term care facilities.
That subcommittee made several recommendations.
4. Crisis and Acute Care Services
The LOC has heard repeatedly from sheriffs and other first responders that
there is a lack of adequate crisis service providers, and that persons with mental
illness and substance abuse disorders are disproportionately ending up in
emergency rooms, county jails, and the State prison system.
In 2006, the General Assembly made an investment in crisis services by
appropriating $ 7 million ( recurring). These funds are currently available to
LMEs. However, they were allocated by DMH according to age and disability
groupings and could be spent only for identified services on a fee- for- service
18
( UCR) basis. While UCR payments make it easier to track how funds are spent,
they reduce flexibility to use the funds to retain key personnel. LMEs also
expressed concern that by allocating the funds according to disability and age
categories, the usefulness of the new funding was diluted.
In 2006, the North Carolina General Assembly also invested $ 5.25 million ( non-recurring)
for crisis services start- up funding. The start- up funds were to be
allocated to regional groups of LMEs based upon crisis plans developed in
conjunction with a consultant retained by DHHS. That consultant has been
retained and the plans submitted by March 1, 2007. DMH has also set aside $ 3
million from the Mental Health Trust Fund for this purpose. However, it is
anticipated that the start- up needs will greatly exceed the available funding.
5. Hospital Bed Day Allocation
Currently, there is no incentive for LMEs to avoid over utilizing the state
institutions.
LMEs " authorize" State psychiatric Hospital usage, but have no authority to
prohibit a person from being sent to the hospital. Subject to federal anti-dumping
laws, community hospitals can send person in crisis to State hospitals
directly. In addition, the decision whether to admit a consumer to a State
hospital is made by staff at the State institution.
The current hospital bed day allocation distributed bed days to LMEs based on
their historical utilization. It also built- in a gradual change over a three year
period to allocate bed days based on the LME s population. This transition has
never occurred. In addition, the current plan charges LMEs $ 500 per additional
bed day utilized over their initial bed day allocation. This practice was
suspended after an LME sued DMH in 2002.
6. County Jails and Justice System Mental Health and Substance Abuse
Services
The LOC continues to hear that there are not sufficient mental health or
substance abuse programs; and, as a result, state and local law enforcement
resources are being utilized by the mentally ill and persons suffering from
substance abuse disorders. In FY2004- 05, 64% of 22,145 inmates ( 14,113) newly
admitted to North Carolina prisons were assessed to have substance dependency
problems. However, only 6,583 inmates in the same year received treatment.
19
DMH currently funds 12 Jail Diversion programs that serve 17 counties at an
average cost of $ 60,000 annually. DMH is working with LMEs and other
community partners ( police and sheriff s departments, CFACs, and NAMI
chapters) to expand the use of CITs ( Crisis Intervention Teams). DMH
administers the TASC Program ( Treatment Accountability for Safer
Communities) for individuals charged or convicted of crimes eligible for
intermediate or community punishment. In FY 2005- 06, 498 intermediate
punishment offenders exited prison and the probation population consisted of
29,051 offenders. DMH estimates that of those individuals, 6,791 are currently
being served. The services needed for this population include: detoxification
services, crisis services, intensive outpatient treatment, comprehensive outpatient
treatment, residential services, community support, and halfway houses.
7. Restructure the MH/ DD/ SA Trust Fund
G. S. 143- 15.3D1 creates the Trust Fund for Mental Health, Developmental
Disabilities, and Substance Abuse Services and Bridge Funding Needs ( Trust
Fund). It is an interest- bearing, nonreverting special trust fund in the Office of
State Budget and Management. Moneys in the Trust Fund are held in trust to be
used solely to meet the mental health, developmental disabilities, and substance
abuse services needs of the State. Any balance remaining in the Trust Fund at
the end of any fiscal year is carried forward in the Trust Fund for the next
succeeding fiscal year.
The Trust Fund only can be used for specified purposes. These are:
o Provide start- up funds and operating support for programs and
services that provide more appropriate and cost- effective community
treatment alternatives for individuals currently residing in the State's
institutions.
o Facilitate the State's compliance with the United States Supreme Court
decision in Olmstead v. L. C. and E. W.
o Facilitate reform of the mental health, developmental disabilities, and
substance abuse services system and expand and enhance treatment and
prevention services in these program areas to remove waiting lists and
provide appropriate and safe services for clients.
o Provide bridge funding to maintain appropriate client services during
transitional periods as a result of facility closings, including departmental
restructuring of services.
o Construct, repair, and renovate State mental health, developmental
disabilities, and substance abuse services facilities.
1 Effective July 1, 2007, G. S. 143- 15.3D is recodified as G. S. 143C- 9- 2.
20
DHHS has never developed a strategic plan for how the funds should be
spent. There is no specific process for applying for funds, or criteria ( other than
purpose) regarding how the funds may be spent. Six years into reform, over
$ 75,000,000 has been placed in the Trust Fund. However, under $ 43,000,000 ( or
less than sixty percent) had been expended. Of the funds expended by February
2007, over 20% were allocated to State- operated facilities.
8. Waivers/ Funding Flexibility
DMH has implemented a single stream funding project which allows it to
allocate state appropriations to selected LMEs without dividing the funding into
age and disability categories. This gives those LMEs much more flexibility to
fully utilize State funding to address community needs. Other LMEs continue to
express great interest in obtaining similar flexibility.
Piedmont Behavioral Healthcare has a MedicaidWaiver that allows it to
independently manage its Medicaid services and resources. This waiver gives
Piedmont Behavioral Healthcare the authority to create and manage its provider
network, manage rates, authorize services, and pay provider claims. Many
legislators and LOC members have expressed interest in expanding the Medicaid
waiver to include more LMEs.
9. Service Dollars for Mental Health
North Carolina ranked 45th nationally in mental health spending ($ 49.64 per
capita), 16th in spending for state mental hospitals ($ 34.68 per capita), and 49th
in spending for community- based programs ($ 14.96 per capita). 2 Two lower
states are New Mexico and Arkansas. Arkansas also does not include the
Medicaid data and New Mexico doesn t include children s mental health. North
Carolina ranked 43rd in per capita funding for mental health services nationally
in 2003 in Grading the States A Report on America s Health Care System for
Serious Mental Illness ( a study by the National Alliance for the Mentally Ill).
An additional $ 30 million per year for mental health services would increase
North Carolina s per capita spending on state- funded mental health services
from $ 17.36 to $ 20.43 per capita ( not factoring in any other proposed
appropriations).
2 These rankings only include funds controlled by the State Mental Health Agency. For
North Carolina, this does not include services paid for by Medicaid.
21
Because access to state- funded services is not an entitlement, LMEs lack
sufficient funds to provide adequate services to consumers. LMEs must choose
between serving more people with fewer services or serving fewer people with
more services. If LMEs paid for the same level of services as Medicaid for state-funded
services, it is estimated that only twenty- five percent ( 25%) of current
mental health patients would receive services.
Another indication of the lack of sufficient services to the mentally ill is the rise
in acute admissions to the State psychiatric hospitals. Since reform, hospital
populations have decreased, but admissions have increased and admissions are
increasing faster than population growth. Acute admissions ( persons who are
discharged in 30 days or less) have increased 22% from 2001 to 2005. Stays from
one to seven days have increased by 83% from 2001 to 2005.
10. Services to the Developmental Disabled
The LOC has heard that Sheltered Workshops, which the State currently funds,
are not an evidence- based practice, but that Supported Employment is. The LOC
has also made it a priority to serve individuals with developmental disabilities in
the community rather than institutions.
In 2006, CMS refused to approve Developmental Therapies ( previously known
as Community Based Services or CBS) as a Medicaid reimbursable service for the
developmentally disabled. The State moved to place as many persons as
possible on CAP- MR/ DD waivers and find other appropriate services. DMH
also recommended, and the General Assembly appropriated, $ 26 million to be
used to " replace services lost due to changes in federal policy and cuts in federal
support." It is not clear whether these funds were meant to " hold harmless"
individuals who had been receiving CBS or whether the funds were meant to
create a new service that is available regardless of whether a person had
previously been receiving CBS.
11. Implementation of New LME Administrative Cost Model and Additional
Funding Needed
S. L. 2006- 66, Section 10.32 directed DHHS to review and revise the LME
systems management cost model and to recalculate LME systems management
allocations for fiscal year 2006- 07. This calculation was to include funds for each
LME to implement 24- hour, seven- days- a- week screening, triage, and referral,
and to review, monitor, and comment on all person centered plans. The special
provision also required DHHS to develop a cost model that fully funded the core
LME functions outlined in G. S. 122C- 115.4( b).
22
DHHS has failed to request adequate funds to pay for local administrative
costs for the last three years, which has consistently resulted in shortfalls in the
DMH budget. In order to cover these shortfalls, in FY 2004- 05, DHHS
transferred $ 24,828,452 in funds from the Division of Medical Assistance to DMH
and used $ 5,130,144 in DMH funds appropriated to other areas. In FY 2005- 06,
DHHS transferred $ 15,502,332 from the Divisions of Aging, Public Health, and
Social Services to DMH and used $ 14,401,656 in DMH funds appropriated to
other areas. In FY 2006- 07, DMH cut $ 19,525,273 from services at the direction of
DHHS. In 2004 and 2005, DHHS failed to inform the General Assembly of the
existence or extent of the shortfall. In 2006, DHHS failed to inform the General
Assembly of the extent of the shortfall.
DMH presented a new LME Administrative Cost Model to the LOC in
November of 2006. The new model is based on the old LME Administrative
Cost Model with some adjustments in the cost categories. DMH informed the
LOC that the total cost is similar to the LME administrative cost for FY 2006- 07,
but will require an additional seventeen million two hundred sixty- seven
thousand three hundred eighty- six dollars ($ 17, 267,386) in state general funds to
be fully funded. DMH has recently increased that figure because it was
determined that the cost model did not provide full funding for LMEs to review,
monitor, and comment on all person centered plans. The new total needed is
$ 19, 200,000.
LMEs are not currently required to report how local funds are spent or collect
income data on consumers. This lack of information makes it difficult to
determine the extent of service gaps or the extent that some consumers might be
able to supplement the cost of their services.
12. Uniform Sliding Fee Schedule
G. S. 122C- 146 requires LMEs and their contractual agencies to prepare fee
schedules for services and make a reasonable effort to collect appropriate
reimbursement for costs from individuals or entities based upon ability to pay or
third- party payment. Funds collected from fees for LME operated services must
be used for the fiscal operation or capital improvements of the LME's programs.
A survey of LMEs by the Division during the fall of 2006 showed that there is
no uniformity across the State regarding these fee schedules. LMEs may or may
not use the same fee schedule for all services. Some look at gross income, others
do not. Some set an income floor below which no fee is charged, others do not.
All LMEs that reported on their sliding fee scale had a maximum income above
which no relief was provided. However, those maximum incomes ranged from
23
$ 7,200 to $ 99,000 for a family of one. A couple of LMEs charged for " no shows",
but the vast majority did not. Only one LME had a maximum monthly liability
limit.
A uniform fee schedule would ensure that consumers are treated consistently
across the State.
13. Clarify Screening, Triage, and Referral Roles
The purpose of the LME function of Screening, Triage and Referral ( STR) is to
gather basic demographic information about the consumer, determine whether
the consumer is target or non- target population, make a very broad initial
determination about the consumer's condition, and provide information
regarding providers who could assist the consumer.
In the spring of 2006, DMH and LMEs negotiated a memorandum of
agreement ( MOA) that outlined how STR should be handled. The MOA stated
that only LMEs would implement STR for both Medicaid and non- Medicaid
eligible consumers. The rational for this position was that LMEs needed to know
who was entering the system and this was the most efficient way for LMEs to
have that information. LMEs were also concerned about " self- referral" by the
providers conducting STR.
During the summer of 2006, the Division of Medical Assistance ( DMA) took
the position that private providers should be able to do STR for Medicaid eligible
consumers. DMA argued that this implemented the " no wrong door" policy of
the system and that when a consumer walks in the door of a private provider,
that consumer has already exercised his or her choice. LMEs objected to this
position, arguing that there was no mechanism for LMEs to know when a
Medicaid eligible consumer enters the system if the provider conducts STR.
Eventually, DMH, DMA and the LMEs negotiated a system by which a provider
must " register" a consumer with the LME within 5 days of the provider
conducting STR. While some LMEs were satisfied with this solution, others took
the position that the policy contradicted language adopted by the General
Assembly in 2006 that lists STR as a " core function" of LMEs. Those LMEs also
argued that the registration system would be inefficient.
It should be noted that the State and Medicaid provide administrative funds
for LMEs to conduct STR. However, STR is not a " service", therefore neither the
State nor Medicaid will pay providers for conducting STR. It is possible that as
more providers conduct STR, Medicaid will reduce its contribution to LME
24
administrative funding on the basis it is paying for a function LMEs are not
implementing.
The Secretary has been under a statutory obligation since 2001 to adopt rules
implementing a " uniform portal process". This term refers to how consumers
enter and exit the public system. Who is authorized to conduct STR is directly
related to the uniform portal process. The LOC co- chairs sent a letter to the
Secretary requesting that she suspend the policy until such time as rules could be
adopted. The Secretary took the issue to the State Consumer and Family
Advisory Council ( state CFAC) who supported the policy as being consumer
friendly. The Secretary has responded to the rules issue with a letter that
indicates that the General Assembly had tacitly given DHHS the authority to
adopt policies outside the rulemaking process. The Secretary has also proposed
a rule that would allow private providers to conduct STR for Medicaid
consumers. The Commission on Mental Health, Developmental Disabilities and
Substance Abuse Services passed a resolution in February of 2007, stating that
the proposed rule conflicts with the policies in G. S. 122C- 115.4( b) and requesting
that the Secretary withdraw the rule.
14. First Commitment Pilot Program
Session Law 2003- 178 authorized the Secretary to temporarily waive certain
statutory requirements pertaining to initial ( first- level) examinations conducted
as part of the involuntary commitment process. Current law requires that first-level
examinations be conducted by either a physician or eligible PhD- level
psychologist. The temporary waiver allowed the Secretary to approve LME
requests to substitute appropriately trained licensed clinical social workers,
masters level psychiatric nurses, or masters level certified clinical addictions
specialists to conduct first- level examinations. The Secretary could grant waivers
to up to five LMEs for periods of time not to exceed three years and required that
participating LMEs, " assure that a physician is available at all times to provide
backup support to include telephone consultation and face- to- face evaluation, if
necessary."
The Secretary approved the following five LMEs to participate in the pilot
program: CenterPoint Human Services, Crossroads Behavioral Healthcare,
Pathways MH/ DD/ SAS, Smoky Mountain Center, and Piedmont Behavioral
Healthcare. DMH delivered a report to the LOC on the " effectiveness, quality,
and efficiency" of services provided under the waiver. The report recommended
that the change be extended state wide and made permanent. However, the vast
majority of the data in the report came from a single LME, making it difficult to
draw broad conclusions about the program.
25
COMMITTEE CONCLUSIONS
The Legislative Oversight Committee on Mental Health, Developmental
Disabilities, and Substance Abuse Services makes the following four
recommendations to the 2007 General Assembly. Each proposal is followed by a
bill draft.
1. That the General Assembly enact comprehensive legislation to build the
necessary services ( infrastructure) at the community level to begin to
address the system's needs.
2. That DHHS adopt a uniform sliding fee schedule.
3. That the General Assembly extend the First Commitment Pilot Program
and clarify that only LMEs may conduct LME core functions.
4. That the General Assembly adopt legislation requiring all health insurers
to provide health insurance coverage for the treatment of mental illness
and substance abuse. The coverage shall be subject to the same benefits
and limitations as the coverage provided for all other covered conditions.
Note: Recommendations 1- 3 above are outlined in greater detail in the
following pages. Each proposal is accompanied by draft legislation.
26
LEGISLATIVE PROPOSAL # 1
BUILD COMMUNITY INFRASTRUCTURE
27
LEGISLATIVE PROPOSAL # 1
A RECOMMENDATION OF THE LEGISLATIVE OVERSIGHT
COMMITTEE FOR MH/ DD/ SA
TO THE 2007 GENERAL ASSEMBLY
AN ACT TO BUILD COMMUNITY INFRASTRUCTURE FOR
MENTALHEALTH, DEVELOPMENTALDISABILITIES AND
SUBSTANCE ABUSE SERVICES, AS RECOMMENDED BY
THE JOINT LEGISLATIVE OVERSIGHT COMMITTEE
Short Title: Build Community Infrastructure MH/ DD/ SA
Brief Overview: This bill would appropriate one hundred thirty- five million,
forty- two thousand, forty- eight dollars ($ 135,042,048) for Fiscal Year 2007- 08
and one hundred thirty- four million, seven hundred seventy- seven thousand,
six hundred forty- seven dollars ($ 134,777,647) for Fiscal Year 2008- 09 to build
community infrastructure for mental health, developmental disabilities, and
substance abuse services. All funds distributed to LMEs are to be allocated by
DHHS as a percentage of the total allocation that is equal to the LME's
percentage of the State's total population that is below the federal poverty
level.
The bill directs the following action and appropriates funds as provided:
Part 1. Funds for Substance Abuse Treatment Programs
$ 10,000,000 for FY 2007- 08 and $ 5,000,000 for FY 2008- 09 from the General
Fund to DHHS to be allocated to LMEs for the purpose of operational
start up, capital, or subsidies related to the creation of residential or
outpatient Substance Abuse Treatment Programs. The LME would
determine program needs and would be allowed to work in conjunction
with other LMEs to address regional needs.
$ 500,000 for FY 2007- 08 and $ 500,000 for FY 2008- 09 from the General
Fund to the North Carolina Area Health Education Centers to provide
technical assistance to LMEs in the identification and implementation of
substance abuse treatment programs.
28
Amends G. S. 122C- 147.1 to include language providing funds for
substance abuse services be appropriated in a broad disability category,
thereby removing the age categories.
Directs the Secretary to develop and implement a system to track funds
expended by LMEs on a grant basis ( single stream funding) for each
disability and age/ disability category and that identifies specific services
purchased with funds.
Allows LMEs to use up to 1% of funds allocated to provide nominal
incentives for substance abuse service consumers that meet specific
treatment benchmarks
Encourages LMEs to use funds for prevention and education.
$ 4,000,000 for FY 2007- 08 and $ 4,000,000 for FY 2008- 09 from the General
Fund to DHHS to provide substance abuse treatment services and case
management for existing pre- and post- plea drug treatment courts.
Part 2. Additional Housing Assistance
Independent- and Supportive- Living Apartments Initiative:
$ 5,250,000 FY 2007- 08 and FY 2008- 09 to DHHS for additional operating
cost subsidies for an estimated 1,000 independent- and supportive- living
apartments for individuals with MH/ DD/ SA disabilities.
Directs DHHS to maximize the number of subsidies that it can pay for
with these funds by first giving priority to NCHFA- financed apartments,
giving second priority to other publicly subsidized apartments, and finally
to market- rate apartments. The apartments shall be made affordable to
individuals with incomes at or below the SSI level. Up to $ 250,000 can be
used for administration of the subsidies.
$ 10,000,000 FY 2007- 08 and FY 2008- 09 to the North Carolina Housing
Trust Fund of the North Carolina Housing Finance Agency ( NCHFA) to
finance independent- and supportive- living apartments for individuals
with MH/ DD/ SA disabilities. These funds can be used to continue the
current Housing 400 Initiative as currently operated.
Requires DHHS and NCHFA to work together to plan the most efficient
and effective use of state resources in the financing and construction of
additional independent- and supportive- living apartments for individuals
with MH/ DD/ SA disabilities.
29
Support Proposals Regarding Mentally Ill in Adult Care Homes:
Directs DHHS to develop a " Transitional Residential Treatment Program"
to provide 24- hour residential treatment and rehabilitation for adults who
have a pattern of difficult behaviors related to mental illness and which
exceed the capabilities of traditional community residential settings.
Directs DHHS to complete a Uniform Screening Tool and notify LMEs of
the mental illness status of any individual admitted to a long- term care
facility within the LME's catchment area.
Authorizes DHHS to increase the maximum number of assignments to the
special assistance in- home program to 2,000 persons.
Reauthorizes the joint ad hoc Subcommittee on Adult Care Home
Residents with Mental Illness to continue its study on identifying rules
and laws to regulate facilities that provide housing for adults with mental
illness in the same location as adults without mental illness.
Part 3. Crisis and Acute Care Services
Expand Crisis Services:
$ 10,000,000 for FY 2007- 08 and $ 5,000,000 for FY 2008- 09 from the General
Fund to DHHS to be allocated to LMEs to continue to implement the crisis
plans developed under S. L. 2006- 66 Section 10.26. $ 250,000 to extend the
contract with the existing crisis services consultant.
$ 15,000,000 for FY 2007- 08 and $ 20,000,000 for FY 2008- 09 from the
General Fund to DHHS to be allocated to LMEs to continue increasing the
crisis services available around the State.
Requires LMEs to make crisis services available to all age and disability
groups, but directs DMH to cease allocating crisis service funds according
to those categories.
Directs DHHS to develop a system for reporting on crisis visits to
community hospital emergency departments.
State Psychiatric Hospital Utilization Pilot:
$ 5,000,000 for FY 2007- 08 and FY 2008- 09 to be used by selected LMEs to
provide crisis services as part of a pilot program to increase community
resources for persons with mental illness and to reduce acute admissions
to State psychiatric hospitals.
30
Part 4. Assistance to Law Enforcement
Services to Persons in Jail:
Directs LMEs to work with public health departments and County Sheriffs
to provide assessments and medications for suicidal, hallucinating or
delusional inmates in county jails.
Directs that the LMEs, county Public Health Departments, and County
Sheriffs to work together to develop standardized mental health screening
tools, protocols, and training related to persons in jails.
$ 1,000,000 for FY 2007- 08 and FY 2008- 09 for LMEs to provide the
assistance described above.
$ 900,000 for FY 2007- 08 and $ 1,800,000 for FY 2008- 09 from the General
Fund to DHHS for 15 additional jail diversion programs, expanding jail
diversion to all counties.
Crisis Intervention Teams:
$ 100,000 for FY 2007- 08 and FY 2008- 09 from the General Fund to DHHS
for technical assistance and training of Crisis Intervention Teams.
Post- Conviction Substance Abuse Treatment Programs:
$ 4,080,000 for FY 2007- 08 and $ 8,160,000 for FY 2008- 09 from the General
Fund to DHHS for 68 additional care managers per year for the Treatment
Accountability for Safer Communities ( TASC) program to cover all known
substance abuse offenders eligible for the program.
$ 1,412,048 for FY 2007- 08 and $ 1,167,647 for FY 2008- 09 from the General
Fund for to the Department of Correction to establish a community- based,
residential substance abuse treatment facility for female offenders on
probation and female DWI offenders paroled to treatment.
Part 5. Restructure theMH/ DD/ SA Trust Fund
Repeals language in G. S. 143C- 9- 2 that allows Trust Fund money to be
used to construct, repair, and renovate State mental health, developmental
disabilities, and substance abuse services facilities.
Requires funds remaining in the Trust fund that are not obligated as of
February 1, 2007, to only be obligated to provide community based
programs.
31
Part 6. Strengthen Services Network
Requires DMH to implement an application process that would allow up
to four additional LMEs to be considered for the single stream funding
process. If the designation is not made by June 1, 2007, the General
Assembly would make the designation.
Directs DMH to study the effectiveness of Piedmont Behavioral
Healthcare s Medicaid Waiver and requires the Secretary to commence the
process for three additional LMEs to apply for the waiver.
Part 7. Filling Service Gaps
Additional Service Dollars for Mental Health:
$ 30,000,000 for FY 2007- 08 and FY 2008- 09 from the General Fund to
DHHS to be allocated to LMEs for the purchase mental health services.
Additional Services for the Developmental Disabilities:
$ 7,000,000 for FY 2007- 08 and FY 2008- 09 for start- up and ongoing support
of Supported Employment services.
$ 9,900,000 for FY 2007- 08 and for FY 2008- 09 for an additional 660 slots in
the Community Alternatives Program for Mental Retardation /
Developmental Disabilities ( CAP- MR/ DD).
Beginning July 1, 2007, developmental therapies will only be available for
participants who are receiving these services on June 30, 2007.
Community Supports/ Tiered Rate Structure:
Directs DHHS to establish at least three rate tiers for the service of
Community Supports.
Part 8. LME Administrative Funding
$ 19,200,000 for FY 2007- 08 and FY 2008- 09 from the General Fund to
DHHS the purpose to fully funding the LME cost model.
Requires LMEs to report to DMH on all services provided ( including
services provided with county funds), income data of all consumers, and
32
on non- UCR spending. The data shall be reported by service and by
disability, and shall include information regarding any services to
Medicaid eligible consumers that are being augmented with State funds.
DMH and the LMEs shall develop a method of reporting on services
delivered with non- UCR funding that allows DMH to measure outcomes
achieved with the use of the funds and also allows more funding to be
used on a non- UCR basis.
$ 1,700,000 for FY 2007- 08 and FY 2008- 09 from the General Fund to DHHS
to be used by the LMEs to pay for the cost of the additional reporting
requirements.
Effective Date: This bill would become effective July 1, 2007.
A copy of the proposed legislation begins on the next page
33
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2007
U D
BILL DRAFT 2007- RCz- 1 [ v. 18] ( 01/ 24)
( THIS IS A DRAFT AND IS NOT READY FOR INTRODUCTION)
3/ 8/ 2007 10: 02: 31 AM
Short Title: Build Community Infrastructure - MH/ DD/ SA. ( Public)
Sponsors: .
Referred to:
1
2 A BILL TO BE ENTITLED
3 AN ACT TO BUILD COMMUNITY INFRASTRUCTURE FOR MENTAL HEALTH,
4 DEVELOPMENTAL DISABILITIES AND SUBSTANCE ABUSE SERVICES
5 AND TO APPROPRIATE FUNDS AS RECOMMENDED BY THE JOINT
6 LEGISLATIVE OVERSIGHT COMMITTEE.
The General Assembly of North Carolina enacts: 78
9 PART I. INCREASE AVAILABILITY OF SUBSTANCE ABUSE TREATMENT.
10
11 START- UP FUNDING FOR SUBSTANCE ABUSE TREATMENT PROGRAMS.
12 SECTION 1.1. There is appropriated from the General Fund to the
13 Department of Health and Human Services ( DHHS), Division of Mental Health,
14 Developmental Disabilities and Substance Abuse Services ( DMH), the sum of ten
15 million dollars ($ 10,000,000) for the 2007- 2008 fiscal year and the sum of five million
16 ($ 5,000,000) for the 2008- 2009 fiscal year. DHHS shall distribute the funds no later
17 than 30 days after the enactment of the Current Operations and Capital Appropriations
18 Act for the 2007- 2009 biennium.
19 Funds appropriated in this Section shall be allocated to local management
20 entities ( LMEs) such that each LME receives a percentage of the total allocation that is
21 equal to that local management entity's percentage of the State's total population that is
22 below the federal poverty level. LMEs shall use the funds for operational start- up,
23 capital, or subsidies related to the creation of both residential and outpatient substance
24 abuse treatment programs. Each LME shall determine the type of substance abuse
25 treatment programs that are needed in that LME's catchment area, issue requests for
26 proposals for the creation of those programs, and award funds for appropriate proposals.
34
LMEs may work 1 together to identify regional needs and may also issue combined
2 requests for proposals to create regional substance abuse treatment programs. LMEs
3 shall distribute funds appropriated under this section no later than six months after the
4 funds are distributed to LMEs by DHHS, and in no event later than June 30, 2008.
5 SECTION 1.2. There is appropriated from the General Fund to the North
6 Carolina Area Health Education Centers ( AHEC), the sum of five hundred thousand
7 dollars ($ 500,000) for the 2007- 2008 fiscal year and the sum of five hundred thousand
8 dollars ($ 500,000) for the 2008- 2009 fiscal year. AHEC shall use the funds to provide
9 technical assistance to LMEs in the identification of substance abuse treatment program
10 needs in the LMEs' catchment areas, the development of requests for proposals, and
11 oversight and accountability for the implementation of substance abuse treatment
12 programs. AHEC shall make recommendations to the Joint Legislative Oversight
13 Committee on Mental Health, Developmental Disabilities and Substance Abuse
14 Services by February 1, 2009, and October 1, 2010, regarding whether there is a need
15 for additional funds for substance abuse start- up and services.
16
17 SUBSTANCE ABUSE TREATMENT SERVICES AND PREVENTION.
18 SECTION 1.3. G. S. 122C- 147.1 reads as rewritten:
19 " § 122C- 147.1. Appropriations and allocations.
20 ( a) Except as provided in subsection ( b) of this section, funds for services
21 delivered to mentally ill and developmentally disabled clients shall be appropriated by
22 the General Assembly in broad age/ disability categories. Funds for services delivered to
23 substance abuse clients shall be appropriated by the General Assembly in a broad
24 disability category. The Secretary shall allocate and account for funds in broad
25 disability or age/ disability categories so that the area authority LME may, with
26 flexibility, earn funds in response to local needs that are identified within the payment
27 policy developed in accordance with G. S. 122C- 143.1( b).
28 ( b) When the General Assembly determines that it is necessary to appropriate
29 funds for a more specific purpose than the broad disability or age/ disability category,
30 the Secretary shall determine whether expenditure accounting, special reporting within
31 earning from a broad fund, the Memorandum of Agreement, or some other mechanism
32 allows the best accounting for the funds.
33 ( c) Funds that have been appropriated by the General Assembly for a more
34 specific purpose than specified in subsection ( a) of this section shall be converted to a
35 broad disability or age/ disability category at the beginning of the second biennium
36 following the appropriation, unless otherwise acted upon by the General Assembly.
37 ( d) The Secretary shall allocate funds to area programs: LMEs as follows:
38 ( 1) To be earned in a purchase of service basis, at negotiated
39 reimbursement rates, for services that are included in the payment
40 policy and delivered to mentally ill, ill and developmentally disabled,
41 and substance abuse disabled clients and for services that are included
42 in the payment policy to other recipients; or recipients.
35
1 ( 2) To be paid under a grant on the basis of agreed- upon expenditures,
2 when the Secretary determines that it would be impractical to pay on a
3 purchase of service basis. expenditures.
4 ( d1) The Secretary shall allocate funds to LMEs for services to substance abuse
5 clients. Notwithstanding subsection ( d) of this section, each LME shall determine
6 whether to earn the funds for services to substance abuse clients in a purchase for
7 service basis, under a grant, or some combination of the two.
8 ( d2) No later than November 1, 2007, the Secretary shall develop and implement a
9 system that LMEs shall use to track the funds each LME expends on a grant basis for
10 each disability and for each age/ disability category and that identifies the specific
11 services purchased with the funds.
12 ( e) After the close of a fiscal year, final payments of funds shall be made: made
13 as follows:
14 ( 1) Under the purchase of service basis, on the earnings of the area
15 authority LME for the delivery to individuals within each
16 age/ disability group, of any services that are consistent with the
17 payment policy established in G. S. 122C- 143.1( b), up to the final
18 allocation amount; oramount.
19 ( 2) When awarded on an expenditure basis, on allowable actual
20 expenditures, up to the final allocation amount.
21 ( e1) Under rules adopted by the Secretary, final payments made under subsection
22 ( e) of this section shall be adjusted on the basis of the audit required in
23 G. S. 122C- 144.1( d)."
24 SECTION 1.4. Consistent with G. S. 122C- 2, the General Assembly strongly
25 encourages LMEs to use a portion of the funds appropriated for substance abuse
26 treatment services to support prevention and education activities.
27 SECTION 1.5. An LME may use up to one percent ( 1%) of funds allocated
28 to it for substance abuse treatment services to provide nominal incentives for consumers
29 who achieve specified treatment benchmarks.
30
31 DRUG TREATMENT COURTS.
32 SECTION 1.6. There is appropriated from the General Fund to the to the
33 Department of Health and Human Services ( DHHS), Division of Mental Health,
34 Developmental Disabilities and Substance Abuse Services the sum of four million
35 dollars ($ 4,000,000) for the 2007- 2008 fiscal year and the sum of four million dollars
36 ($ 4,000,000) for the 2008- 2009 fiscal year. The funds shall be used to provide
37 substance abuse treatment services and case management for existing pre- and post- plea
38 Adult Drug Treatment Courts, DWI Treatment Courts, Youth Drug Treatment Courts,
39 Mental Health Treatment Courts and Family Drug Treatment Courts.
40
41 PART II. ADDITIONAL HOUSING ASSISTANCE
42
43 INDEPENDENT- AND SUPPORTIVE- LIVING APARTMENTS INITIATIVE
36
1 SECTION 2.1 There is appropriated from the General Fund to the
2 Department of Health and Human Services ( DHHS) the sum of five million two
3 hundred fifty thousand dollars ($ 5,250,000) for the 2007- 2008 fiscal year and the sum
4 of five million two hundred fifty thousand dollars ($ 5,250,000) for the 2008- 2009 fiscal
5 year. The funds shall be used to pay for operating cost subsidies for approximately one
6 thousand ( 1,000) independent- and supportive- living apartments for individuals with
7 mental health, developmental, or substance abuse disabilities. DHHS shall maximize
8 the number of subsidies that can be paid for with these funds by giving first priority to
9 North Carolina Housing Finance Agency- financed apartments, giving second priority to
10 other publicly subsidized apartments, and third priority to market- rate apartments. Up
11 to two hundred fifty thousand dollars ($ 250,000) may be used for administration of the
12 subsidies.
13 SECTION 2.2. There is appropriated from the General Fund to the North
14 Carolina Housing Trust Fund the sum of ten million dollars ($ 10,000,000) for the
15 2007- 2008 fiscal year and the sum of ten million dollars ($ 10,000,000) for the
16 2008- 2009 fiscal year. The funds shall be used to finance independent- and
17 supportive- living apartments for individuals with mental health, developmental, or
18 substance abuse disabilities. The funds shall be used to continue and expand the
19 Housing 400 Initiative created in 2006.
20 SECTION 2.3. The independent and supportive living apartments for
21 persons with disabilities constructed from funds appropriated in this act for that purpose
22 shall be affordable to persons with incomes at or below the Supplemental Security
23 Income ( SSI) level.
24 SECTION 2.4. The Department of Health and Human Services and the
25 North Carolina Housing Finance Agency shall work together to develop a plan for the
26 most efficient and effective use of State resources in the financing and construction of
27 additional independent- and supportive- living apartments for individuals mental health,
28 developmental, or substance abuse disabilities. This plan shall address gaps in the
29 housing continuum identified by the study that DHHS will conduct during SFY 2006- 07
30 and SFY 2007- 08. DHHS and NCHFA shall report this plan and also the progress of
31 the Housing 400 Initiative to the Joint Legislative Oversight Committee on Mental
32 Health, Developmental Disabilities and Substance Abuse Services by March 1, 2008.
33
34 SUPPORT PROPOSALS REGARDING MENTALLY ILL IN ADULT CARE
35 HOMES.
36 SECTION 2.5. The Department of Health and Human Services shall
37 develop a " Transitional Residential Treatment Program" service definition to provide
38 24- hour residential treatment and rehabilitation for adults who have a pattern of difficult
39 behaviors related to mental illness and which exceed the capabilities of traditional
40 community residential settings. DHHS shall submit the new service definition to the
41 Centers for Medicare and Medicaid for approval no later than 90 days after the
42 enactment of the Current Operations and Capital Appropriations Act for the 2007- 2009
43 biennium.
37
1 SECTION 2.6. The joint ad hoc subcommittee regarding the mentally ill in
2 adult care homes convened by the Joint Legislative Oversight Committee on Mental
3 Health, Developmental Disabilities and Substance Abuse Services and the North
4 Carolina Commission on Aging may continue to study and identify rules and laws that
5 are necessary to regulate facilities that provide housing for adults with mental illness in
6 the same location with adults without mental illness.
7 SECTION 2.7. The Department of Health and Human Services shall
8 complete the development of a Uniform Screening Tool ( UST) to be used by LMEs to
9 determine the mental health of any individual admitted to any long term care facility
10 within an LME's catchment area. The UST shall be available for use no later than 90
11 days after the enactment of the Current Operations and Capital Appropriations Act for
12 the 2007- 2009 biennium.
13 SECTION 2.8. The Department of Health and Human Services shall make
14 available placements for at least two thousand ( 2,000) adults through the State/ County
15 Special Assistance In- Home Program. LMEs shall be responsible for the delivery of
16 case management for recipients who have a mental illness, developmental disability, or
17 substance abuse disorder and are within the target populations for those disabilities.
18
19 PART III. CRISIS AND ACUTE CARE SERVICES
20
21 EXPAND CRISIS SERVICES
22 SECTION 3.1. There is appropriated from the General Fund to the
23 Department of Health and Human Services, Division of Mental Health, Developmental
24 Disabilities, and Substance Abuse Services, the sum of ten million dollars
25 ($ 10,000,000) for the 2007- 2008 fiscal year and the sum of five million dollars
26 ($ 5,000,000) for the 2008- 2009 fiscal year. LMEs shall use these funds to continue to
27 implement the crisis plans developed under S. L. 2006- 66, Section 10.26. DHHS may
28 use up to two hundred fifty thousand dollars ($ 250,000) of the funds appropriated under
29 this Section to extend its contract with the crisis services consultant authorized under
30 Section 10.26( b) of S. L. 2006- 66.
31 SECTION 3.2. S. L. 2006- 66, Section 10.26( d) reads as rewritten:
32 " SECTION 10.26.( d) With the assistance of the consultant, the area
33 authorities and county programs LMEs within a crisis region shall work together to
34 identify gaps in their ability to provide a continuum of crisis services for all consumers
35 and use the funds allocated to them to develop and implement a plan to address those
36 needs. At a minimum, the plan must address the development over time of the following
37 components: 24- hour crisis telephone lines, walk- in crisis services, mobile crisis
38 outreach, crisis respite/ residential services, crisis stabilization units, 24- hour beds,
39 facility- based crisis, in- patient crisis, detox, and transportation. Options for voluntary
40 admissions to a secured facility must include at least one service appropriate to address
41 the mental health, developmental disability, and substance abuse needs of adults, and
42 the mental health, developmental disability, and substance abuse needs of children.
43 Options for involuntary commitment to a secured facility must include at least one
44 option in addition to admission to a State facility.
38
1 If all area authorities and county programs LMEs in a crisis region determine
2 that a facility- based crisis center is needed and sustainable on a long- term basis, the
3 crisis region shall first attempt to secure those services through a community hospital or
4 other community facility. If all the area authorities and county programsLMEs in the
5 crisis region determine the region's crisis needs are being met, the area authorities and
6 county programsLMEs may use the funds to meet local crisis service needs."
7 SECTION 3.3. There is appropriated from the General Fund to the
8 Department of Health and Human Services, Division of Mental Health, Developmental
9 Disabilities, and Substance Abuse Services, the sum of fifteen million dollars
10 ($ 15,000,000) for the 2007- 2008 fiscal year and the sum of twenty million dollars
11 ($ 20,000,000) for the 2008- 2009 fiscal year to be used to provide crisis services.
12 Funds appropriated in this Section shall be allocated to local management
13 entities ( LMEs) such that each LME receives a percentage of the total allocation that is
14 equal to that LME's percentage of the State's total population that is below the federal
15 poverty level. DHHS shall distribute the funds no later than 30 days after the enactment
16 of the Current Operations and Capital Appropriations Act for the 2007- 2009 biennium.
17 LMEs shall work with sheriffs and county public health agencies to serve individuals
18 who are incarcerated or being held in county jails and who are in need of crisis services.
19 SECTION 3.4. G. S. 122C- 147.1, as amended by Section 1.3 of this act reads
20 as rewritten:
21 " § 122C- 147.1. Appropriations and allocations.
22 ( a) Except as provided in subsection ( b) of this section, funds for services
23 delivered to mentally ill and developmentally disabled clients shall be appropriated by
24 the General Assembly in broad age/ disability categories. Funds for services delivered to
25 substance abuse clients shall be appropriated by the General Assembly in a broad
26 disability category. The Secretary shall allocate and account for funds in broad
27 disability or age/ disability categories so that the LME may, with flexibility, earn funds
28 in response to local needs that are identified within the payment policy developed in
29 accordance with G. S. 122C- 143.1( b).
30 ( b) When the General Assembly determines that it is necessary to appropriate
31 funds for a more specific purpose than the broad disability or age/ disability category,
32 the Secretary shall determine whether expenditure accounting, special reporting within
33 earning from a broad fund, the Memorandum of Agreement, or some other mechanism
34 allows the best accounting for the funds.
35 ( b1) Notwithstanding subsection ( b) of this section, funds appropriated by the
36 General Assembly for crisis services shall not be allocated in broad disability or
37 age/ disability categories.
38 ( c) Funds that have been appropriated by the General Assembly for a more
39 specific purpose than specified in subsection ( a) of this section shall be converted to a
40 broad disability or age/ disability category at the beginning of the second biennium
41 following the appropriation, unless otherwise acted upon by the General Assembly.
42 This subsection shall not apply to funds appropriated by the General Assembly for crisis
43 services.
44 ( d) The Secretary shall allocate funds to LMEs as follows:
39
( 1) 1 To be earned in a purchase of service basis, at negotiated
2 reimbursement rates, for services that are included in the payment
3 policy and delivered to mentally ill and developmentally disabled
4 clients and for services that are included in the payment policy to other
5 recipients.
6 ( 2) To be paid under a grant on the basis of agreed- upon expenditures.
7 ( d1) The Secretary shall allocate funds to LMEs for crisis services and services to
8 substance abuse clients. Notwithstanding subsection subsections ( b) and ( d) of this
9 section, each LME shall determine whether to earn the funds for crisis services and
10 funds for services to substance abuse clients in a purchase for service basis, under a
11 grant, or some combination of the two.
12 ( d2) No later than November 1, 2007, the Secretary shall develop and implement a
13 system that LMEs shall use to track the funds each LME expends on a grant basis for
14 each disability and for each age/ disability category and that identifies the specific
15 services purchased with the funds.
16 ( e) After the close of a fiscal year, final payments of funds shall be made as
17 follows:
18 ( 1) Under the purchase of service basis, on the earnings of the LME for
19 the delivery to individuals within each age/ disability group, of any
20 services that are consistent with the payment policy established in
21 G. S. 122C- 143.1( b), up to the final allocation amount.
22 ( 2) When awarded on an expenditure basis, on allowable actual
23 expenditures, up to the final allocation amount.
24 ( e1) Under rules adopted by the Secretary, final payments made under subsection
25 ( e) of this section shall be adjusted on the basis of the audit required in
26 G. S. 122C- 144.1( d)."
27 SECTION 3.5. The Department of Health and Human Services shall
28 develop a system for reporting to LMEs information regarding all visits to community
29 hospital emergency departments by individuals who are in crisis due to a mental illness,
30 a developmental disability or a substance abuse disorder. The system shall be
31 implemented no later than 90 days after the enactment of the Current Operations and
32 Capital Appropriations Act for the 2007- 2009 biennium.
33
34 STATE PSYCHIATRIC HOSPITAL – UTILIZATION PILOT
35 SECTION 3.6. In addition to the crisis service funds appropriated under
36 Section 3.3 of this act, there is appropriated from the General Fund to the Department of
37 Health and Human Services, Division of Mental Health, Developmental Disabilities,
38 and Substance Abuse Services, the sum of five million dollars ($ 5,000,000) for the
39 2007- 2008 fiscal year and the sum of five million dollars ($ 5,000,000) for the 2008-
40 2009 fiscal year to be used by selected LMEs to provide crisis services as part of a pilot
41 program to increase community resources for persons with mental illness and to reduce
42 acute admissions to State psychiatric hospitals. LMEs that have at least one of all of the
43 following shall be eligible to use the funds appropriated under this section: mobile
44 crisis team, facility- based crisis unit, walk- in facility, and a contract with a community
40
hospital for 1 inpatient beds for involuntary commitments. An LME that participates in
2 this pilot program during the 2007- 2008 fiscal year shall be eligible to participate in the
3 program during the 2008- 2009 fiscal year if the LME can document a reduction in the
4 involuntary commitment admissions from that LME's catchment area to the State
5 psychiatric hospital that serves that catchment area during the 2007- 2008 fiscal year.
6 The budgets for the State psychiatric hospitals shall not be reduced during the 2007-
7 2008 fiscal year as a result of this pilot. However, those budgets shall be adjusted in
8 following years to reflect the previous year's use by the LMEs participating in the pilot
9 program.
10
11 PART IV. ASSISTANCE TO LAW ENFORCEMENT
12
13 SERVICES TO PERSONS IN JAIL
14 SECTION 4.1. Local Management Entities shall work with County Public Health
15 departments and County Sheriffs to provide medical assessments and medication, if
16 appropriate, for inmates housed in county jails who are suicidal, hallucinating or
17 delusional. LMEs shall also examine ways to provide additional treatment to persons
18 who are determined to be psychotic, severely depressed, suicidal, or who have
19 substance abuse disorders. LMEs, County Public Health departments and County
20 Sheriffs shall work together to develop all of the following:
21 ( 1) A standardized evidence- based screening instrument to be used when
22 offenders are booked.
23 ( 2) A designated LME employee who is responsible for screening the daily jail
24 booking log for known mental health consumers.
25 ( 3) Protocols for effective communication between the LME and the jail staff
26 including collaborative development of medication management protocols between the
27 jail staff and the mental health providers.
28 ( 4) Training to help detention officers recognize signals of mental illness.
29 There is appropriated from the General Fund to the Department of Health and
30 Human Services ( DHHS), Division of Mental Health, Developmental Disabilities and
31 Substance Abuse Services ( DMH), the sum of one million dollars ($ 1,000,000) for the
32 2007- 2008 fiscal year and the sum of one million ($ 1,000,000) for the 2008- 2009 fiscal
33 year. Funds appropriated in this Section shall be allocated to local management entities
34 ( LMEs) such that each LME receives a percentage of the total allocation that is equal to
35 that local management entity's percentage of the State's total population that is below
36 the federal poverty level. LMEs shall use the funds to provide the assistance required
37 under this Section.
38 SECTION 4.2. There is appropriated from the General Fund to the
39 Department of Health and Human Services, Division of Mental Health, Developmental
40 Disabilities, and Substance Abuse Services the sum of nine hundred thousand dollars
41 ($ 900,000) for the 2007- 2008 fiscal year and the sum of one million eight hundred
42 thousand dollars ($ 1,800,000) for the 2008- 2009 fiscal year. The funds shall be used by
43 LMEs to expand post- arrest jail diversion programs. The funds would expand the
44 program by fifteen ( 15) programs each year.
41
1
2 CRISIS INTERVENTION TEAMS
3 SECTION 4.3. There is appropriated from the General Fund to the
4 Department of Health and Human Services, Division of Mental Health, Developmental
5 Disabilities, and Substance Abuse Services the sum of one hundred thousand dollars
6 ($ 100,000) for the 2007- 2008 fiscal year and the sum of one hundred thousand dollars
7 ($ 100,000) for the 2008- 2009 fiscal year. The funds shall be used by LMEs to develop
8 Crisis Intervention Teams ( CITs) statewide. The Division shall develop the ability to
9 provide training within North Carolina.
10
11 POST- CONVICTION SUBSTANCE ABUSE TREATMENT PROGRAMS
12 SECTION 4.4. There is appropriated from the General Fund to the
13 Department of Health and Human Services, Division of Mental Health, Developmental
14 Disabilities, and Substance Abuse Services the sum of four million eighty thousand
15 dollars ($ 4,080,000) for the 2007- 2008 fiscal year and the sum of eight million one
16 hundred sixty thousand dollars ($ 8,160,000) for the 2008- 2009 fiscal year. The funds
17 shall be used to increase the number of TASC ( Treatment Alternative for Safer
18 Communities) case managers by sixty- eight per year.
19 SECTION 4.5 There is appropriated from the General Fund to the
20 Department of Correction the sum of one million four hundred twelve thousand, forty-21
eight dollars ($ 1,412,048) for the 2007- 2008 fiscal year, and the sum of one million one
22 hundred sixty- seven thousand six hundred forty- seven dollars ($ 1,167,647) for the
23 2008- 2009 fiscal year. These funds shall be used to establish a community- based
24 residential substance abuse treatment facility for female offenders on probation and
25 female DWI offenders paroled to treatment. The facility shall provide thirty 90- day
26 therapeutic beds and twenty 28- day short term treatment beds.
27
28 PART V. USE OF MENTAL HEALTH TRUST FUNDS
29 SECTION 5.1. Funds remaining in the Trust Fund for Mental Health,
30 Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs
31 that are not obligated as of February 1, 2007, may only be obligated to provide
32 community- based programs. Any funds not obligated as of February 1, 2007 and not
33 subsequently obligated to provide community- based programs shall be deemed to be
34 unencumbered and shall be allocated to local management entities ( LMEs) such that
35 each LME receives a percentage of the total allocation that is equal to that local
36 management entity's percentage of the State's total population that is below the federal
37 poverty level. DHHS shall distribute the funds no later than 30 days after the enactment
38 of the Current Operations and Capital Appropriations Act for the 2007- 2009 biennium.
39 SECTION 5.2. Effective July 1, 2007, G. S. 143C- 9- 2 reads as rewritten:
40 " § 143C- 9- 2. Trust Fund for Mental Health, Developmental Disabilities, and
41 Substance Abuse Services and Bridge Funding Needs.
42 ( a) The Trust Fund for Mental Health, Developmental Disabilities, and
43 Substance Abuse Services and Bridge Funding Needs is established as an
44 interest- bearing, nonreverting special trust fund in the Office of State Budget and
42
Management. Moneys in the Trust 1 Fund shall be held in trust and used solely to increase
2 community- based services that meet the mental health, developmental disabilities, and
3 substance abuse services needs of the State. The Trust Fund shall be used to supplement
4 and not to supplant or replace existing State and local funding available to meet the
5 mental health, developmental disabilities, and substance abuse services needs of the
6 State.
7 The State Treasurer shall hold the Trust Fund separate and apart from all other
8 moneys, funds, and accounts. The State Treasurer shall be the custodian of the Trust
9 Fund and shall invest its assets in accordance with G. S. 147- 69.2 and G. S. 147- 69.3.
10 Investment earnings credited to the assets of the Trust Fund shall become part of the
11 Trust Fund. Any balance remaining in the Trust Fund at the end of any fiscal year shall
12 be carried forward in the Trust Fund for the next succeeding fiscal year.
13 Moneys in the Trust Fund shall be expended only in accordance with subsection ( b)
14 of this section and in accordance with limitations and directions enacted by the General
15 Assembly.
16 ( b) Moneys in the Trust Fund for Mental Health, Developmental Disabilities, and
17 Substance Abuse Services and Bridge Funding Needs shall be used only to:
18 ( 1) Provide start- up funds and operating support for programs and services
19 that provide more appropriate and cost- effective community treatment
20 alternatives for individuals currently residing in the State's mental
21 health, developmental disabilities, and substance abuse services
22 institutions.
23 ( 2) Facilitate the State's compliance with the United States Supreme Court
24 decision in Olmstead v. L. C. and E. W.
25 ( 3) Facilitate reform of the mental health, developmental disabilities, and
26 substance abuse services system and expand Expand and enhance
27 mental health, developmental disabilities, and substance abuse
28 treatment and prevention services in these program areas in the
29 community to remove waiting lists and provide appropriate and safe
30 services for clients.
31 ( 4) Provide bridge funding to maintain appropriate client services during
32 transitional periods as a result of facility closings, including
33 departmental restructuring of services.
34 ( 5) Construct, repair, and renovate State mental health, developmental
35 disabilities, and substance abuse services facilities.
36 ( c) Notwithstanding G. S. 143C- 1- 2, any nonrecurring savings in State
37 appropriations realized from the closure of any State psychiatric hospitals that are in
38 excess of the cost of operating and maintaining a new State psychiatric hospital shall not
39 revert to the General Fund but shall be placed in the Trust Fund and shall be used for the
40 purposes authorized in this section. Notwithstanding G. S. 143C- 1- 2, recurring savings
41 realized from the closure of any State psychiatric hospitals shall not revert to the
42 General Fund but shall be credited to the Department of Health and Human Services to
43 be used only for the purposes of subsections ( b)( 1), ( b)( 2) and ( b)( 3) of this section.
43
( d) Beginning 1 July 1, 2007, the Secretary of the Department of Health and
2 Human Services shall report annually to the Fiscal Research Division on the
3 expenditures made during the preceding fiscal year from the Trust Fund. The report
4 shall identify each expenditure by recipient and purpose, shall indicate the authority
under subsection ( b) of this section for the expenditure." 56
7 PART VI. STRENGTHEN THE SERVICES NETWORK
8 SECTION 6.1. The Department of Health and Human Services shall
9 designate four additional local management entities to receive all State allocations
10 through single stream funding. If DHHS has not made the designations by June 1,
11 2007, then the General Assembly shall make the designations.
12 SECTION 6.2. No later than June 1, 2007, the Department of Health and
13 Human Services shall commend the process for three additional local management
14 entities to apply for a 1915( b) Medicaid waiver.
15 SECTION 6.3. The Joint Legislative Oversight Committee for Mental
16 Health, Developmental Disabilities and Substance Abuse Services shall study the
17 effectiveness of the 1915( b) Medicaid waiver and of those LMEs operating under a
18 waiver.
19
20 PART VII. FILLING SERVICE GAPS
21
22 ADDITIONAL MENTAL HEALTH SERVICES
23 SECTION 7.1. There is appropriated from the General Fund to the
24 Department of Health and Human Services, Division of Mental Health, Developmental
25 Disabilities and Substance Abuse Services, the sum of thirty million dollars
26 ($ 30,000,000) for the 2007- 2008 fiscal year, and the sum of thirty million dollars
27 ($ 30,000,000) for the 2008- 2009 fiscal year. The funds shall be used to purchase
28 mental health services. Funds appropriated in this Section shall be allocated to local
29 management entities ( LMEs) such that each LME receives a percentage of the total
30 allocation that is equal to that local management entity's percentage of the State's total
31 population that is below the federal poverty level.
32
33 ADDITIONAL SERVICES FOR THE DEVELOPMENTALLY DISABLED
34 SECTION 7.2. There is appropriated from the General Fund to the
35 Department of Health and Human Services, Division of Mental Health, Developmental
36 Disabilities and Substance Abuse Services, the sum of nine million nine hundred
37 thousand dollars ($ 9,900,000) for the 2007- 2008 fiscal year and the sum of nine million
38 nine hundred thousand dollars ($ 9,900,000) for the 2008- 2009 fiscal year. The funds
39 shall be used to increase the number of individuals who can participate in the
40 Community Alternatives Program for Mental Retardation/ Developmental Disabilities
41 ( CAP MR/ DD).
42 SECTION 7.3. There is appropriated from the General Fund to the
43 Department of Health and Human Services, Division of Mental Health, Developmental
44 Disabilities and Substance Abuse Services, the sum of seven million dollars
44
1 ($ 7,000,000) for the 2007- 2008 fiscal year and the sum of seven million dollars
2 ($ 7,000,000) for the 2008- 2009 fiscal year. The funds shall be used to for start- up and
3 ongoing support of Supported Employment Long- Term Support services.
4 SECTION 7.4. Beginning July 1, 2007, Developmental Therapies services
5 shall only be available to individuals who were receiving that service on June 30, 2007.
6 Developmental Therapy funds that are not utilized shall be made available to LMEs to
7 use for CAP MR/ DD slots or for other Supported Employment Long- Term Support
8 services for the developmentally disabled. An LME that receives all its State
9 appropriated allocations through a grant basis shall also receive its Developmental
10 Therapies allocation on the same basis.
11 The Department of Health and Human Services shall develop a new,
12 Medicaid reimbursable service for submission to the Center for Medicare and Medicaid
13 Services to replace Developmental Therapies no later than November 1, 2007.
14 SECTION 7.5. The Department of Health and Human Services shall
15 develop and apply to the Centers for Medicare and Medicaid Services for additional
16 home and community- based waivers for persons with developmental disabilities. In
17 conjunction with the existing CAP MR/ DD waiver, the new waivers will create a tiered
18 system of services.
19
20 COMMUNITY SUPPORT SERVICES/ TIERED RATE STRUCTURE
21 SECTION 7.6. The Department of Health and Human Services shall
22 establish at least three rate tiers for the service of Community Supports. The rates shall
23 be based upon the level of qualifications of the individuals delivering the service and
24 shall include a professional- level case management tier, a professional- level skill
25 building tier, and a paraprofessional- level tier.
26
27 PART VIII. LME ADMINISTRATIVE FUNDING
28
29 SECTION 8.1. There is appropriated from the General Fund to the
30 Department of Health and Human Services, Division of Mental Health, Developmental
31 Disabilities and Substance Abuse Services, the sum of nineteen million two hundred
32 thousand dollars ($ 19,200,000) for the 2007- 2008 fiscal year and the sum of nineteen
33 million two hundred thousand dollars ($ 19,200,000) for the 2008- 2009 fiscal year to be
34 used to fully fund the LME administrative cost model developed by the Division
35 pursuant to S. L. 2006- 66, Sec. 10.32.( b).
36 Based upon information provided to the General Assembly by the Division, it is the
37 understanding of the General Assembly that the funds appropriated under this Section in
38 addition to the funds contained in the Governor's Base Budget proposal are sufficient to
39 fully fund the State's contribution for LME systems administration as determined by the
40 LME administrative cost model developed under S. L. 2006- 66, Sec. 10.32.( b).
41 Notwithstanding any provision in Chapter 143C of the General Statutes or any other
42 provision of law, the Secretary shall not transfer funds from any other fund code or
43 program category within DHHS to fund LME system administration.
44
45
SECTION 1 8.2. The General Assembly finds that counties have budgeted
2 almost one hundred twenty- one million dollars ($ 121,000,000) to LMEs to pay for
3 mental health, developmental disabilities and substance abuse services. However, the
4 General Assembly lacks information regarding the specific services that are purchased
5 with those county funds. The General Assembly also lacks data regarding the incomes
6 of persons receiving mental health, developmental disabilities and substance abuse
7 services that are paid for by either State or county funds. This lack of data severely
8 limits the General Assembly's ability to determine the distribution of services that are
9 being paid for with public funds, whether persons who are eligible for Medicaid are
10 being enrolled in that program, and whether expanding the State's Medicaid eligibility
11 criteria would impact a significant number of mental health, developmental disabilities
12 and substance abuse service consumers. Therefore, LMEs shall report to the Division
13 all expenditures by the LME for services, start- up expenses, and capital and operational
14 expenditures, regardless of the source of the funds and regardless of whether the funds
15 were earned on a payment for service or grant basis. This reporting shall include
16 specific information regarding the expenditure of all funds provided to the LME by the
17 county or counties contained in the LME's catchment area. To the extent possible, the
18 information shall be submitted through the Integrated Payment and Reimbursement
19 System. LMEs shall also gather income data for all individuals receiving services.
20 There is appropriated from the General Fund to the Department of Health and Human
21 Services, Division of Mental Health, Developmental Disabilities and Substance Abuse
22 Services, the sum of one million seven hundred thousand dollars ($ 1,700,000) for the
23 2007- 2008 fiscal year and the sum of one million seven hundred thousand dollars
24 ($ 1,700,000) for the 2008- 2009 fiscal year to be used by LMEs to pay for the cost of the
25 additional data reporting required under this Section..
26
27 PART IX. EFFECTIVE DATE
28
29 SECTION 9.1. This act becomes effective July 1, 2007.
46
LEGISLATIVE PROPOSAL # 2
UNIFORM SLIDING FEES
47
LEGISLATIVE PROPOSAL # 2
A RECOMMENDATION OF THE LEGISLATIVE OVERSIGHT
COMMITTEE FOR MH/ DD/ SA
TO THE 2007 GENERAL ASSEMBLY
AN ACT TO CREATE A UNIFORM SLIDING FEE
SCHEDULE FOR MH/ DD/ SA SERVICES, AS
RECOMMENDED BY THE JOINT LEGISLATIVE
OVERSIGHT COMMITTEE FORMENTALHEALTH,
DEVELOPMENTALDISABILITIES AND SUBSTANCE
ABUSE SERVICES
Short Title: Uniform Sliding Fees MH/ DD/ SA Services
Brief Overview: This bill would:
1. Direct the Secretary to adopt rules to set a uniform sliding fee schedule.
The fee schedule shall apply to all services paid for with either State of
local funds. Private providers will be required to utilize the schedule.
Amend G. S. 122C- 146 accordingly.
2. Direct DHHS to identify all services that do not have income- related
eligibility requirements.
Effective Date: This bill would become effective when it becomes law and
apply to services provided on or after the fee schedule is adopted.
A copy of the proposed legislation begins on the next page
48
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2007
U D
BILL DRAFT 2007- RCfz- 5 [ v. 3] ( 02/ 23)
( THIS IS A DRAFT AND IS NOT READY FOR INTRODUCTION)
3/ 2/ 2007 1: 47: 55 PM
Short Title: Uniform Sliding Fees - MH/ DD/ SA Services. ( Public)
Sponsors: .
Referred to:
1
2 A BILL TO BE ENTITLED
3 AN ACT TO CREATE A UNIFORM SLIDING FEE SCHEDULE FOR MH/ DD/ SA
4 SERVICES AS RECOMMENDED BY THE JOINT LEGISLATIVE OVERSIGHT
5 COMMITTEE FOR MENTAL HEALTH, DEVELOPMENTAL DISABILITIES
AND SUBSTANCE ABUSE SERVICES. 67
8 The General Assembly of North Carolina enacts:
9 SECTION 1. G. S. 122C- 146 reads as rewritten:
10 " § 122C- 146. Fee for service.
11 ( a) The area authorityLME and its contractual provider agencies shall prepare fee
12 schedules implement the standardized fee schedule and sliding fee schedule adopted by
13 the Secretary for services and under G. S. 122C- 112.1( a). The LME and its contractual
14 provider agencies shall also make every reasonable effort to collect appropriate
15 reimbursement for costs in providing these services from individuals or entities able to
16 pay, including insurance and third- party payment, except that individuals However, no
17 individual may be refused services because of an inability to pay.
18 ( b) Individuals may not be charged for free services, as required in " The
19 Amendments to the Education of the Handicapped Act", P. L. 99- 457, provided to
20 eligible infants and toddlers and their families. This exemption from charges does not
21 exempt insurers or other third- party payors from being charged for payment for these
22 services, if the person who is legally responsible for any eligible infant or toddler is first
23 advised that the person may or may not grant permission for the insurer or other payor
24 to be billed for the free services. However, no individual may be refused services
25 because of an inability to pay.
26 ( c) All funds collected from fees from area authorityLME operated services shall
27 be used for the fiscal operation or capital improvements of the area authority'sLME's
49
programs. The 1 collection of fees by an area authorityLME may not be used as
2 justification for reduction or replacement of the budgeted commitment of local tax
3 revenue. All funds collected from fees by contractual provider agencies shall be used to
4 provide services to individuals in targeted populations."
5 SECTION 2. 122C- 112.1( a) is amended by adding a new subdivision to
6 read:
7 " § 122C- 112.1. Powers and duties of the Secretary.
8 ( a) The Secretary shall do all of the following:
9 . . .
10 ( 34) Adopt rules to implement a standard fee schedule and sliding fee
11 schedule to be used by LMEs and by contractual provider agencies
12 under G. S. 122C- 146."
13 SECTION 3. The Secretary of the Department of Health and Human
14 Services shall identify all services that are funded by or through the Department's
15 budget and that do not require income- based criteria in order for an individual to be
16 eligible to receive the service. The Secretary shall develop a proposal for implementing
17 income- based criteria for eligibility for those programs and shall submit the proposal to
18 the General Assembly and the Fiscal Research Division by November 1, 2007.
19 SECTION 4. This act is effective when it becomes law and applies to
20 services provided on or after the effective date of the rules adopted by the Secretary
21 under Section 2 of this act.
22
50
LEGISLATIVE PROPOSAL # 3
EXTEND PILOT/ CLARIFY LME FUNCTIONS
51
LEGISLATIVE PROPOSAL # 3
A RECOMMENDATION OF THE LEGISLATIVE OVERSIGHT COMMITTEE FOR
MH/ DD/ SA
TO THE 2007 GENERAL ASSEMBLY
AN ACT TO EXTEND THE FIRST COMMITMENT PILOT
PROGRAMAND TO FURTHER CLARIFY LME CORE
FUNCTIONS, AND TO ALLOWADDITIONAL TIME FOR AN
LME TO MERGE WHEN IT HAS GONE BELOWTHE 200,000
POPULATION OR SIX COUNTY THRESHOLD DUE TO A
CHANGE IN COUNTY MEMBERSHIP AS RECOMMENDED BY
THE JOINT LEGISLATIVE OVERSIGHT COMMITTEE ON
MENTAL HEALTH, DEVELOPMENTAL DISABILITIES AND
SUBSTANCE ABUSE SERVICES.
Short Title: Extend Pilot/ Clarify LME Functions MH/ DD/ SA
Brief Overview: This bill would:
1. First Commitment Pilot Program Reauthorizes the pilot program and adds
five additional LMEs.
2. Clarify Screening / Triage/ Referral Rolls Amends G. S. 122C- 115.4( b) to clarify
that only LMEs are authorized to conduct the core LME functions.
3. LME Size Requirements Amends G. S. 122C- 115( a1) to allow that an LME that
does not comply with the catchment area requirements because of a change in
county membership has 12 months from the effective date of the change to
comply with LME size requirements.
Effective Date: The act would be effective when it becomes law.
A copy of the proposed legislation begins on the next page
52
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2007
U D
BILL DRAFT 2007- RCz- 6 [ v. 6] ( 02/ 23)
( THIS IS A DRAFT AND IS NOT READY FOR INTRODUCTION)
3/ 7/ 2007 3: 51: 58 PM
Short Title: Extend Pilot/ Clarify LME Functions/ LME Admin. ( Public)
Sponsors: .
Referred to:
A BILL TO BE ENTITLED
AN ACT TO EXTEND THE FIRST COMMITMENT PILOT PROGRAM, TO
FURTHER CLARIFY LME CORE FUNCTIONS AND TO ALLOW
ADDITIONAL TIME FOR AN LME TO MERGE WHEN IT HAS GONE BELOW
THE 200,000 POPULATION OR SIX COUNTY THRESHOLD DUE TO A
CHANGE IN COUNTY MEMBERSHIP AS RECOMMENDED BY THE JOINT
LEGISLATIVE OVERSIGHT COMMITTEE ON MENTAL HEALTH,
DEVELOPMENTAL DISABILITIES AND SUBSTANCE ABUSE SERVICES.
The General Assembly of North Carolina enacts:
SECTION 1.( a). S. L. 2003- 178, as amended by S. L. 2006- 66, Section 10.27,
reads as rewritten:
" SECTION 1. The Secretary of Health and Human Services may, upon request of a
phase- one local management entitya LME, waive temporarily the requirements of
G. S. 122C- 261 through G. S. 122C- 263 and G. S. 122C- 281 through G. S. 122C- 283
pertaining to initial ( first- level) examinations by a physician or eligible psychologist of
individuals meeting the criteria of G. S. 122C- 261( a) or G. S. 122C- 281( a), as applicable,
as follows:
( 1) The Secretary has received a request from a phase- one local
management entityan LME to substitute for a physician or eligible
psychologist, a licensed clinical social worker, a masters level
psychiatric nurse, or a masters level certified clinical addictions
specialist to conduct the initial ( first- level) examinations of individuals
meeting the criteria of G. S. 122C- 261( a) or G. S. 122C- 281( a). The
waiver shall be implemented on a pilot- program basis. The request
from the local management entityLME shall be submitted as part of the
entity's local business plan and shall specifically describe:
a. How the purpose of the statutory requirement would be better
served by waiving the requirement and substituting the
proposed change under the waiver.
53
b. How the waiver will enable the local management entityLME to
improve the delivery or management of mental health,
developmental disabilities, and substance abuse services.
c. How the services to be provided by the licensed clinical social
worker, the masters level psychiatric nurse, or the masters level
certified clinical addictions specialist under the waiver are
within each of these professional's scope of practice.
d. How the health, safety, and welfare of individuals will continue
to be at least as well protected under the waiver as under the
statutory requirement.
( 2) The Secretary shall review the request and may approve it upon
finding that:
a. The request meets the requirements of this section.
b. The request furthers the purposes of State policy under
G. S. 122C- 2 and mental health, developmental disabilities, and
substance abuse services reform.
c. The request improves the delivery of mental health,
developmental disabilities, and substance abuse services in the
counties affected by the waiver and also protects the health,
safety, and welfare of individuals receiving these services.
d. The duties and responsibilities performed by the licensed
clinical social worker, the masters level psychiatric nurse, or the
masters level certified clinical addictions specialist are within
the individual's scope of practice.
( 3) The Secretary shall evaluate the effectiveness, quality, and efficiency
of mental health, developmental disabilities, and substance abuse
services and protection of health, safety, and welfare under the waiver.
The Secretary shall send a report on the evaluation to the Joint
Legislative Oversight Committee on Mental Health, Developmental
Disabilities, and Substances Abuse Services on or before July 1, 2006.
by October 1, 2009. The report shall include data gathered from all
participating LMEs since the beginning of the pilot.
( 4) The waiver granted by the Secretary under this section shall be in
effect until October 1, 2007. 2010.
( 5) The Secretary may grant a waiver under this section to up to five ten
local management entities that have been designated as phase- one
entities as of July 1, 2003. LMEs
( 6) In no event shall the substitution of a licensed clinical social worker,
masters level psychiatric nurse, or masters level certified clinical
addictions specialist under a waiver granted under this section be
construed as authorization to expand the scope of practice of the
licensed clinical social worker, the masters level psychiatric nurse, or
the masters level certified clinical addictions specialist.
( 7) The Department shall assure that staff performing the duties are trained
and privileged to perform the functions identified in the waiver. The
Department shall involve stakeholders including, but not limited to, the
North Carolina Psychiatric Association, The North Carolina Nurses
Association, National Association of Social Workers, The North
Carolina Substance Abuse Professional Certification Board, North
Carolina Psychological Association, The North Carolina Society for
Clinical Social Work, and the North Carolina Medical Society in
developing required staff competencies.
54
( 8) The local management entityLME shall assure that a physician is
available at all times to provide backup support to include telephone
consultation and face- to- face evaluation, if necessary.
SECTION 2. This act becomes effective July 1, 2003, and expires October 1, 2007.
2010."
SECTION 1.( b). The Joint Legislative Oversight Committee for Mental
Health, Developmental Disabilities, and Substance Abuse Services ( LOC) shall review
the report submitted by the Secretary under S. L. 2003- 178, as amended by S. L. 2006- 66,
Section 10.27 and Section 1.( b) of this act. The LOC shall make recommendations to
the 2011 General Assembly regarding whether to further extend the pilot or make it
permanent and state wide.
SECTION 2. G. S. 122C- 115.4 reads as rewritten
" § 122C- 115.4. Functions of local management entities.
( a) Local management entities are responsible for the management and oversight
of the public system of mental health, developmental disabilities, and substance abuse
services at the community level. An LME shall plan, develop, implement, and monitor
services within a specified geographic area to ensure expected outcomes for consumers
within available resources.
( b) The primary functions of an LME are designated in this subsection and shall
not be conducted by any other entity unless an LME voluntarily enters into a contract
with that entity under subsection ( c) of this section. The primary functions include all of
the following:
( 1) Access for all citizens to the core services described in G. S. 122C- 2. In
particular, this shall include the implementation of a 24- hour a day,
seven- day a week screening, triage, and referral process and a uniform
portal of entry into care.
( 2) Provider endorsement, monitoring, technical assistance, capacity
development, and quality control. An LME may remove a provider's
endorsement if a provider fails to meet defined quality criteria or fails
to provide required data to the LME.
( 3) Utilization management, utilization review, and determination of the
appropriate level and intensity of services including the review and
approval of the person centered plans for consumers who receive
State- funded services. Concurrent review of person centered plans for
all consumers in the LME's catchment area who receive Medicaid
funded services.
( 4) Authorization of the utilization of State psychiatric hospitals and other
State facilities. Authorization of eligibility determination requests for
recipients under a CAP- MR/ DD waiver.
( 5) Care coordination and quality management. This function includes the
direct monitoring of the effectiveness of person centered plans. It also
includes the initiation of and participation in the development of
required modifications to the plans for high risk and high cost
consumers in order to achieve better client outcomes or equivalent
55
outcomes in a more cost- effective manner. Monitoring effectiveness
includes reviewing client outcomes data supplied by the provider,
direct contact with consumers, and review of consumer charts.
( 6) Community collaboration and consumer affairs including a process to
protect consumer rights, an appeals process, and support of an effective
consumer and family advisory committee.
( 7) Financial management and accountability for the use of State and local
funds and information management for the delivery of publicly funded
services.
( c) Subject to subsection ( b) of this section and all applicable State and federal
laws and rules established by the Secretary, an area authority, or county program or
consolidated human services agency LME may contract with a public or private entity
for the implementation of LME functions articulated designated under subsection ( b) of
this section. Nothing in this subsection shall be construed to supercede the authority of
an LME to be the sole entity with the authority to implement the functions designated in
subsection ( b) of this section.
( d) Except as provided in G. S. 122C- 142.1 and G. S. 122C- 125, the Secretary
may not remove from an LME or designate another entity as also eligible to implement
any function enumerated under subsection ( b) of this section unless all of the following
applies:
( 1) The LME fails during the previous three months to achieve a
satisfactory outcome on any of the critical performance measures
developed by the Secretary under G. S. 122C- 112.1( 33).
( 2) The Secretary provides focused technical assistance to the LME in the
implementation of the function. The assistance shall continue for at
least six months or until the LME achieves a satisfactory outcome on
the performance measure, whichever occurs first.
( 3) If, after six months of receiving technical assistance from the
Secretary, the LME still fails to achieve or maintain a satisfactory
outcome on the critical performance measure, the Secretary shall enter
into a contract with another LME or agency to implement the function
on behalf of the LME from which the function has been removed.
( e) Notwithstanding subsection ( d) of this section, in the case of serious financial
mismanagement or serious regulatory noncompliance, the Secretary may temporarily
remove an LME function after consultation with the Joint Legislative Oversight
Committee on Mental Health, Developmental Disabilities, and Substance Abuse
Services.
( f) The Commission shall adopt rules regarding the following matters:
( 1) The definition of a high risk consumer. Until such time as the
Commission adopts a rule under this subdivision, a high risk consumer
means a person who has been assessed as needing emergent crisis
services three or more times in the previous 12 months.
56
( 2) The definition of a high cost consumer. Until such time as the
Commission adopts a rule under this subdivision, a high cost consumer
means a person whose treatment plan is expected to incur costs in the
top twenty percent ( 20%) of expenditures for all consumers in a
disability group.
( 3) The notice and procedural requirements for removing one or more
LME functions under subsection ( d) of this section."
SECTION 3. G. S. 122C- 115( a1) reads as rewritten:
"( a1) Effective July 1, 2007, The the Department of Health and Human Services
shall reduce by ten percent ( 10%) annually the administrative funding for area
authorities and county programs LMEs that do not comply with the catchment area
requirements of this section. subsection ( a) of this section. However, an LME that does
not comply with the catchment area requirements because of a change in county
membership shall have twelve months from the effective date of the change to comply
with subsection ( a) of this section."
SECTION 4. This act is effective when it becomes law.
57

REPORT TO THE 2007 GENERAL ASSEMBLY
Co- Chair s:
Senator Mart in Nesbitt
Representative Ver la Insko
JOINT LEGISLATIVE OVERSIGHT COMMITTEE
ON MENTAL HEALTH, DEVELOPMENTAL
DISABILITIES, AND SUBSTANCE ABUSE SERVICES
[ This page left intentionally blank.]
2
TABLE OF CONTENTS
Letter of Transmittal ................................................................................................... 5
Joint Legislative Oversight Committee on Mental Health Developmental
Disabilities and Substance Abuse Services Membership.................................. 7
Preface........................................................................................................................ .. 9
Committee Proceedings ........................................................................................... 10
Committee Findings ................................................................................................. 16
Committee Conclusions ........................................................................................... 26
Legislative Proposal # 1: Build Community Infrastructure ............................... 27
Legislative Proposal # 2: Uniform Sliding Fee Schedule .................................... 47
Legislative Proposal # 3: Extent Pilot/ Clarify LME Functions.......................... 51
3
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4
JOINT LEGISLATIVE OVERISGHT COMMITTEE ONMENTAL HEALTH,
DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES
State Legislative Building
Raleigh, North Carolina 27603
Senator Martin Nesbitt, Co- Chair Representative Verla Insko, Co- Chair
MARCH 7, 2007
TO THE MEMBERS OF THE 2007 GENERAL ASSEMBLY ( 2007 Regular Session):
The Joint Legislative Oversight Committee on Mental Health, Developmental
Disabilities and Substance Abuse Services submits to you for your consideration
its report pursuant to G. S. 120- 231.
Respectfully Submitted,
_______________________________
Rep. Verla Insko, Co- Chair
_______________________________
Sen. Martin Nesbitt, Co- Chair
5
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6
JOINT LEGISLATIVE OVERSIGHT COMMITTEE ON MENTAL HEALTH,
DEVELOPMENTAL DISABILITIES AND SUBSTANCE ABUSE SERVICES
2005- 2006 MEMBERSHIP LIST
Senator Martin Nesbitt – Co- Chair
300- B Legislative Office Building
Raleigh, NC 27603
O: 715- 3001 Email: Martinn@ ncleg. net
Representative Verla Insko – Co- Chair
2121 Legislative Building
Raleigh, NC 27601
O: 733- 7208 Email: Verlai@ ncleg. net
Senator Austin Allran
516 Legislative Office Building
Raleigh, NC 27603
O: 733- 5876 Email: Austina@ ncleg. net
Representative Martha Alexander
2208 Legislative Building
Raleigh, NC 27601
O: 733- 5807 Email: Marthaa@ ncleg. net
Senator Janet Cowell
1028 Legislative Building
Raleigh, NC 27601
O: 715- 6400 Email: Janetc@ ncleg. net
Representative Jeffrey Barnhart
608 Legislative Office Building
Raleigh, NC 27601
O: 715- 2009 Email: Jeffreyba@ ncmail. net
Senator Charlie Dannelly
2010 Legislative Building
Raleigh, NC 27601
O: 733- 5955 Email: Charlied@ ncleg. net
Representative Beverly Earle
634 Legislative Office Building
Raleigh, NC 27603
O: 715- 2530 Email: Beverlye@ ncleg. net
Senator James Forrester
1129 Legislative Building
Raleigh, NC 27601
O: 715- 3050 Email: Jamesf@ ncleg. net
Representative Bob England
2219 Legislative Building
Raleigh, NC 27601
O: 733- 5749 Email: Bobe@ ncmail. net
Senator Jeanne Lucas
300- G Legislative Office Building
Raleigh, NC 27603
O: 733- 4599 Email: Jeannel@ ncleg. net
Rep. Jean Farmer- Butterfield - Adv. Member
611 Legislative Office Building
Raleigh, NC 27603
O: 733- 5898 Email: Jeanf@ ncleg. net
Senator Vernon Malone
2113 Legislative Building
Raleigh, NC 27601
O: 733- 5880 Email: Vernonm@ ncleg. net
Representative Carolyn Justice
301C Legislative Office Building
Raleigh, NC 27603
O: 715- 9664 Email: Carolynju@ ncleg. net
Senator William Purcell
625 Legislative Office Building
Raleigh, NC 27603
O: 733- 5953 Email: Williamp@ ncleg. net
Representative Edd Nye
639 Legislative Office Building
Raleigh, NC 27603
O: 733- 5477 Email: Eddn@ ncleg. net
Senator Larry Shaw – Advisory Member
621 Legislative Office Building
Raleigh, NC 27603
O: 733- 9349 Email: Larrys@ ncleg. net
Rep. Earline Parmon – Adivsory Member
632 Legislative Office Building
Raleigh, NC 27603
O: 733- 5829 Email: Earlinep@ ncleg. net
Representative Fred Steen
514 Legislative Office Building
Raleigh, NC 27603
O: 733- 5881 Email: Fredst@ ncmail. net
7
STAFF TO LOC
Kory Goldsmith, Research Division
O: 733- 2578
Email: koryg@ ncleg. net
Shawn Parker, Research Division
O: 733- 2578
Email: shawnp@ ncleg. net
Rennie Hobby, Committee Assistant
O: 733- 5639
Email: mentalhealthca@ ncleg. net
Ben Popkin, Research Division
O: 733- 2578
Email: benp@ ncleg. net
Andrea Russo- Poole, Fiscal Research
O: 733- 4910
Email: andrear@ ncleg. net
Natalie Towns, Fiscal Research
O: 733- 4910
Email: nataliet@ ncleg. net
8
PREFACE
The Joint Legislative Oversight Committee on Mental Health, Developmental
Disabilities, and Substance Abuse Services ( LOC) is established in Article 27 of
Chapter 120 of the General Statutes. The LOC is charged with examining, on a
continual basis, the system- wide issues affecting the development, financing,
administration, and delivery of mental health, developmental disabilities, and
substance abuse services, including issues related to governance, accountability
and quality of services.
The LOC consists of sixteen members, eight appointed by the President Pro
Tempore of the Senate and eight appointed by the Speaker of the House of
Representatives. The members appointed by the President Pro Tempore must
include all of the following: at least two must be members of the Senate
Committee on Appropriations, the chair of the Senate Appropriations Committee
on Human Resources, and at least two must be of the minority party. The
members appointed by the Speaker of the House of Representatives must include
all of the following: at least two members of the House Committee on
Appropriations, the cochairs of the House of Representatives Appropriations
Subcommittee on Health and Human Services, and at least two members of the
minority party.
The co- chairs for the 2005- 2006 Session are Senator Martin Nesbitt and
Representative Verla Insko.
9
COMMITTEE PROCEEDINGS
LEGISLATIVE OVERSIGHT COMMITTEE
The Joint Legislative Oversight Committee on Mental Health, Developmental
Disabilities, and Substance Abuse Services ( LOC) met on six occasions during the
2006- 2007 interim. The LOC also met four times in two days during the 2007
Regular Session. The following is a brief summary of the Committee's
proceedings. Detailed minutes and information from each Committee meeting
are available in the Legislative Library.
September 6, 2006
The LOC convened its first meeting on Wednesday, September 6, 2006, at 9: 30
A. M. in Room 643 of the Legislative Office Building. At this meeting, the LOC
heard several updates concerning legislative actions of interest and the proposed
LOC work schedule for the coming interim.
The meeting began with a review of legislative actions from the 2006 Session.
Andrea Russo, Fiscal Research, provided a description of budget actions and
noted $ 95.8 million dollars was appropriated for the 2006- 2007 fiscal year for
mental health, developmental disabilities, and substance abuse services. Shawn
Parker, Research Division, reviewed procedural and policy changes enacted in
H. B. 2077, Mental Health Reform Changes ( S. L. 2006- 142 ), H. B. 2120, Strengthen
LOC Oversight Role ( S. L. 2006- 32), and S. B. 1741 ( S. L. 2006- 66), Modify
Appropriations Act of 2005.
Leza Wainwright, Deputy Director of the Division of Mental Health,
Developmental Disabilities and Substance Abuse Services ( DMH), discussed
how funds appropriated for the 2006- 2007 fiscal year would be allocated to
community programs. In response to concerns over the disproportionate
funding between area programs, Ms. Wainwright indicated results of the
Funding Equity Study would be ready in a future meeting. Ms. Wainwright
continued her presentation by explaining the role of the two consultants
authorized by legislation. The first would assist DHHS and the LMEs with crisis
planning and the second would help with State- level strategic planning and
technical assistance to the LMEs. She also noted that the report on how Mental
Health Trust Fund dollars would be spent would be ready to present at the
October 6th meeting.
Ms. Wainwright outlined how DHHS planned to accomplish tasks assigned by
the Legislature during the last session. She noted that the total number of
10
individuals served in State Hospitals and in the community had increased
significantly and was asked to provide a statewide count. Ms. Wainwright also
addressed the concerns of sheriffs departments regarding confusion in knowing
where to take a person in need of help as well as issues regarding mentally ill
people in adult care facilities.
Terry Hatcher, Director, Office of Property and Construction for the
Department of Health and Human Services ( DHHS), gave an update on the
status of capital projects related to the Developmental Centers, the replacement
of the Cherry and Broughton psychiatric hospitals, and the funding for each
project.
Tara Larson, Assistant Director of Clinical Policy, Division of Medical
Assistance ( DMA), discussed the transition to Value Options and several factors
contributing to the delay in authorization performing utilization review ( UR) for
Medicaid services. Ms. Larson also explained that DMA monitoring of Value
Options began on June 1 and identified problem areas and preliminary actions
taken to ensure services would not be disrupted.
Kory Goldsmith, Research Division, reviewed the LOC work plan proposed by
the co- chairs for the interim. The work plan covered studying: LME funding
allocations, Services Gap and other LME issues. The goal was to review all the
topics and make recommendations to the 2007 General Assembly.
Representative Insko explained that she and Representative Earle had met
with DHHS to discuss a report that had been submitted to the Commission on
Aging on mentally ill residents in Adult Care Homes. It was suggested that a
joint subcommittee of the Commission on Aging and the LOC look into the
needs of those residents and services offered to mentally ill people in adult care
facilities.
Vivian Leon, Mental Health Program Manager with the Best Practice Team,
gave an in- depth description of services and supports for the developmentally
disabled.
October 4, 2006
The LOC held its second meeting on Wednesday, October 4, 2006, at 9: 30 A. M.
in Room 643 of the Legislative Office Building.
Kory Goldsmith, Research Division, provided a review of legislation requiring
DMH to study the long- term plan for meeting the mental health, developmental
disabilities, and substance abuse services needs.
11
Steve Hairston, Section Chief for Operations Support, DMH, introduced
consultant Dr. Christina Thompson, Heart of the Matter Consulting, Inc., who
presented the preliminary report on the Long Range Study for MHDDSAS and
Service Gaps.
Dr. Thompson explained how the statistical models were created and
reviewed some of the components used in the model. Dr. Thompson also
provided a preliminary estimate that it would cost $ 500,000,000 to bring North
Carolina up to the national average over a five year period of time.
Committee staff Kory Goldsmith and Andrea Russo reviewed follow- up
questions from the September meeting.
Dr. Bonnie Morell, Team Leader for the Best Practice Team, DMH, presented
an in- depth description of services for the mentally ill.
Secretary Carmen Hooker Odom, DHHS, addressed the LOC to provide
information relating to a shortfall in LME administration funds for fiscal year
2006- 07. The Secretary indicated that the new cost model would produce an
adequate and appropriate calculation of the amount needed to fund the LME
administrative functions.
Leza Wainwright, Deputy Director, DMH, identified eight areas of service
funding that would be cut to make up the shortfall in LME administrative
funding. Ms. Wainwright also provided the LOC with the proposed spending
allocations from the Mental Health Trust Fund.
November 13, 2006
The LOC convened its third meeting on Monday, November 13, 2006, at 9: 30
A. M. in Room 643 of the Legislative Office Building.
Leza Wainwright, Deputy Director, DMH, provided the LOC with information
regarding the revised cost model for payment of LME administrative functions.
Ms. Wainwright also provided a preliminary report on the Funding Allocation
Study. Ms. Wainwright described sources of funding and went on to state that
the consultants would present the Finance cost model to the LOC at the
December meeting. She said that DMH and the consultants would work with the
North Carolina Association of County Commissioners and the North Carolina
Council of Community Programs on recommendations related to the finance
model and that, following approval of the model, implementation would begin
on July 1, 2007.
12
The audience was recognized for comments regarding a technical amendment
to the Medicaid State Plan. Tara Larson, Assistant Director for Clinical Policy,
DMA, said that Value Options would not implement the amendment until
February 1, 2007.
Patricia Amend, Director of Policy, Planning, and Technology with the North
Carolina Housing Finance Agency ( NCHFA) and Julia Bick, Housing
Coordinator, DHHS, provided an update on the Housing 400 Initiative. The
Housing 400 Initiative will be delivered through three programs; the Supportive
Housing Development Program 400, the Preservation Loan Program 400, and the
Housing Credit Program.
Flo Stein, Chief, Community Policy Program, DMH, offered an in- depth
description of substance abuse services.
Kory Goldsmith, Research Division, offered follow- up information from
previous meetings.
December 6, 2006
The LOC met for the fourth time on Wednesday, December 6, 2006, at 9: 45
A. M. in Room 643 of the Legislative Office Building.
Senator Nesbitt announced that the Service Gaps Study and the Funding
Allocation Study would not be heard by the LOC on that day, but the co- chairs
and staff would receive the reports on December 15, 2006. Leza Wainwright,
Deputy Director, DMH, stated that some of the reports conclusions were based
on faulty data and needed review. Many LOC members expressed serious
concerns about the failure of DMH to provide the report. Mike Moseley,
Director, DMH, explained that certain items were contracted out because the
DMH did not have the capacity to do the work internally, but it was incumbent
upon the Division that the product be accurate.
Ms. Wainwright described DMH s progress on tasks outlined in legislation
during the 2006 Session and made clarifications with regard to administrative
costs for the LMEs.
Dr. Bert Bennett, Program Manager for the Best Practice Team, DMH,
delivered a report on the First Level Commitment Pilot Program. The report
recommended that the program be expanded statewide.
The LOC then received comments from the audience including several sheriffs.
13
January 10, 2007
The LOC met on Wednesday, January 10, 2007, at 9: 30 A. M. in Room 643 of the
Legislative Office Building.
Dr. Allen Dobson, Assistant Secretary for Health Policy and Medical
Assistance, DHHS, gave an update on the technical amendment to the CAP-MR/
DD waiver and discussed a data exchange pilot program which has enabled
three participating LMEs to access the Medicaid database to track what is
happening with consumers.
Jeff Weaver, General Assembly Chief of Police, addressed the building
evacuation policy.
Representative Insko took a moment to recognize the passing of
Representative Howard Hunter and Senator Robert Holloman.
Eddie Caldwell, Executive Vice President and General Counsel to the N. C.
Sheriffs Association, offered information regarding mental health services
available for pre- trial detainees in county jails.
Kory Goldsmith, Research Division, reviewed the study provisions related to
the consultant s reports.
Dr. Christine Thompson, Heart of the Matter Consulting, Inc., gave her
presentation on the final report for the Long Range Plan and Gaps Analysis.
It was suggested that the Funding Allocation Report be presented at the next
meeting to allow staff ample time to review the report and to allow further
questioning of the Gaps Study Report by the committee.
Dr. Thompson reviewed estimates of funding resources based on
recommendations made in the report and stated that the collective impact of the
proposed increases would cost $ 2.7 billion over a 5 year period.
Andrea Russo- Poole, Fiscal Research, offered follow- up information from
previous meetings.
The LOC then received comments from the audience.
January 16, 2007
The LOC met on Wednesday, January 16, 2007, at 1: 30 P. M. in Room 643 of
the Legislative Office Building.
14
Leza Wainwright, Deputy Director, DMH gave a brief overview of the
Funding Allocation Model. Ms. Wainwright then gave several financing
recommendations which included: 1) Expand Medicaid eligibility; 2) Pursue
Medicaid waivers; 3) Increase cost sharing under Medicaid; 4) Standardize first
party payments and third party collection protocols
Senator Nesbitt then recognized LOC staff, who recommended that because
neither DMH nor the consultant had provided a methodology for the models,
and because the models had produced some unexpected results, the LOC should
retain an independent party to forensically deconstruct the models in order to
understand the methodology and to verify the models accuracy.
LOC staff then reviewed possible options for legislation. Committee members
discussed each of the seventeen options and offered feedback. The co- chairs
directed staff to go back and craft proposals based on the discussions. Senator
Nesbitt suggested that the size and speed of building the new State hospitals also
be considered.
Senator Nesbitt stated that the LOC would hold a final meeting after session
started to review and approve the final report.
March 6- 7, 2007
The LOC met on Tuesday, March 6, 2007, at 6: 00 P. M. in Room 643 of the
Legislative Office Building. Committee staff began a review of the Committee's
draft report. Because of the late hour, the LOC adjourned until the following day.
The LOC met at 10: 00 A. M., 1: 00 P. M., and 5: 00 P. M. on Wednesday, March 7,
2007. Staff completed a review of the draft report and the LOC voted on eight
proposed amendments. The LOC then approved the report.
15
COMMITTEE FINDINGS
Introduction
In 2001, the General Assembly adopted significant reform legislation to
restructure the delivery of services to individuals with mental illnesses,
developmental disabilities, and substance abuse disorders. The foundations of
reform included: local management of the system, decreased reliance on State
institutions, community- based best practice treatments, increased consumer
involvement, access to multiple and qualified providers, and performance and
fiscal accountability to the State and local governments. As part of the
legislation, the General Assembly directed the Secretary of DHHS ( Secretary)
and the Division of Mental Health, Developmental Disabilities, and Substance
Abuse Services ( Division) to undertake administering system reform. The
reform has been overseen by the General Assembly and the Joint Legislative
Oversight Committee on Mental Health, Developmental Disabilities, and
Substance Abuse Services ( LOC).
During the 2005- 2006 interim, the LOC examined the status of services, the
strength of State leadership, and the role of local agencies ( LMEs). It found that
mental health and substance abuse services are substantially under- funded when
compared to other states. It also found that reform was moving away from
strong local management. In response to these findings, the LOC recommended
and the 2006 Session of the General Assembly approved significant increases in
funding and modifications to the reform laws. The following is a summary of
those changes:
1. The General Assembly appropriated $ 95.8 million in additional funding
for mental health, developmental disabilities, and substance abuse services and
authorized $ 328.3 million in certificates of participation for the construction of
new psychiatric hospitals in Goldsboro and Morganton and to complete
construction of the new facility in Butner. Major areas funded included:
o Developmental Therapies - $ 26 million recurring to replace services to
the developmentally disabled lost due to changes in federal policy and
cuts in federal support.
o Community- Based Services - $ 21.4 million recurring for mental health,
substance abuse, and crisis services.
o Housing - $ 10.9 million in non- recurring funds for the North Carolina
Housing Trust Fund and $ 1.2 million in recurring funds for operating
assistance for 400 new apartments.
16
o Mental Health Trust Fund - $ 14.39 million in non- recurring funds.
2. The General Assembly also enacted laws to clarify the role of LMEs,
increase the qualifications for LME directors and finance officers, strengthen
local governing boards, codify the roles of consumer and family advisory
committees, and require that the Secretary develop State and local performance
measures.
Despite the gains made during the 2006 Session, the system continues to face
significant challenges. The ability of LMEs to manage publicly funded services
continues to be compromised by policy decisions made at the departmental level.
The State psychiatric hospitals are experiencing record admission rates while at
the same time keeping individuals for shorter and shorter periods of time.
Communities are struggling to develop crisis services, including in- patient
hospitalization. The continued lack of appropriate and affordable housing
impacts all disability groups, making it very difficult for individuals to leave
institutions and live and work in their communities.
1. Start- up Funding for Substance Abuse Treatment Programs
A 2003- 2004 National Survey on Drug Use and health conducted by SAMHSA
( U. S. Substance Abuse and Mental Health Administration) estimated that 2.59%
of North Carolina s population needed, but did not receive, treatment for illicit
drug use. An estimated 5.09% needed, but did not receive, treatment for alcohol
use. Using North Carolina population estimates, this means that approximately
220,000 people were lacking treatment for illicit drug use and approximately
475,000 lacked treatment for alcohol use.
In 2005, almost twenty percent ( 20%) of persons admitted to the State
psychiatric hospitals had a primary diagnosis of drug or alcohol abuse. The
median length of stay for these individuals ranged from three to six ( 3- 6) days.
Most substance abuse consumers are not Medicaid eligible, meaning indigent
persons must rely upon State funds to pay for services. To achieve the national
average per capita funding in FY2007- 08 for substance abuse services, DMH
estimates it would cost over thirty- five million dollars ($ 35,000,000).
It is widely acknowledged that to be effective, substance abuse treatment must
be available when the consumer is willing to accept it. This means the provider
must be able to respond to consumer needs twenty- four hours a day, seven days
a week, 365 days a year. This is sometimes referred to as the fire house model.
However, under the current funding system, providers only receive payment
upon actually rending a service to an individual consumer. This is sometimes
17
referred to as the fee for service model. The fee for service payment system
does not lend itself to the fire house model of service delivery.
2. Additional Housing Assistance
Lack of affordable housing options continues to be sited as one of the major
barriers to successfully treating individuals in the community. However, in
2006, the LOC recommended, and the General Assembly funded, the Housing
400 Initiative. This initiative appropriated $ 1.2 million ( recurring) for operating
assistance of 400 independent- and supportive- living apartments and also
appropriated $ 10.94 million ( non- recurring) for financing the apartments. The
North Carolina Housing Finance Agency and the Department of Health and
Human Services are jointly operating this initiative.
3. Support Proposals Regarding Mentally Ill in Adult Care Homes
Currently there is no level of care between the hospital inpatient setting and
the adult care home setting, and there is a lack of options for independent living.
In 2005, the public mental health system served over 174,000 adults with
mental illness, 1,149 of whom lived in licensed mental health homes and 5,000 of
whom lived in adult care homes. Nationally, approximately 10% of adults with
serious mental illness need specialized housing. It was reported that over 40% of
the adult care home population carries an active diagnosis of mental illness.
The co- chairs of the Study Commission on Aging and the LOC determined it
would be beneficial to appoint a joint, ad hoc subcommittee to study issues
relating to serving mentally ill individuals who reside in long term care facilities.
That subcommittee made several recommendations.
4. Crisis and Acute Care Services
The LOC has heard repeatedly from sheriffs and other first responders that
there is a lack of adequate crisis service providers, and that persons with mental
illness and substance abuse disorders are disproportionately ending up in
emergency rooms, county jails, and the State prison system.
In 2006, the General Assembly made an investment in crisis services by
appropriating $ 7 million ( recurring). These funds are currently available to
LMEs. However, they were allocated by DMH according to age and disability
groupings and could be spent only for identified services on a fee- for- service
18
( UCR) basis. While UCR payments make it easier to track how funds are spent,
they reduce flexibility to use the funds to retain key personnel. LMEs also
expressed concern that by allocating the funds according to disability and age
categories, the usefulness of the new funding was diluted.
In 2006, the North Carolina General Assembly also invested $ 5.25 million ( non-recurring)
for crisis services start- up funding. The start- up funds were to be
allocated to regional groups of LMEs based upon crisis plans developed in
conjunction with a consultant retained by DHHS. That consultant has been
retained and the plans submitted by March 1, 2007. DMH has also set aside $ 3
million from the Mental Health Trust Fund for this purpose. However, it is
anticipated that the start- up needs will greatly exceed the available funding.
5. Hospital Bed Day Allocation
Currently, there is no incentive for LMEs to avoid over utilizing the state
institutions.
LMEs " authorize" State psychiatric Hospital usage, but have no authority to
prohibit a person from being sent to the hospital. Subject to federal anti-dumping
laws, community hospitals can send person in crisis to State hospitals
directly. In addition, the decision whether to admit a consumer to a State
hospital is made by staff at the State institution.
The current hospital bed day allocation distributed bed days to LMEs based on
their historical utilization. It also built- in a gradual change over a three year
period to allocate bed days based on the LME s population. This transition has
never occurred. In addition, the current plan charges LMEs $ 500 per additional
bed day utilized over their initial bed day allocation. This practice was
suspended after an LME sued DMH in 2002.
6. County Jails and Justice System Mental Health and Substance Abuse
Services
The LOC continues to hear that there are not sufficient mental health or
substance abuse programs; and, as a result, state and local law enforcement
resources are being utilized by the mentally ill and persons suffering from
substance abuse disorders. In FY2004- 05, 64% of 22,145 inmates ( 14,113) newly
admitted to North Carolina prisons were assessed to have substance dependency
problems. However, only 6,583 inmates in the same year received treatment.
19
DMH currently funds 12 Jail Diversion programs that serve 17 counties at an
average cost of $ 60,000 annually. DMH is working with LMEs and other
community partners ( police and sheriff s departments, CFACs, and NAMI
chapters) to expand the use of CITs ( Crisis Intervention Teams). DMH
administers the TASC Program ( Treatment Accountability for Safer
Communities) for individuals charged or convicted of crimes eligible for
intermediate or community punishment. In FY 2005- 06, 498 intermediate
punishment offenders exited prison and the probation population consisted of
29,051 offenders. DMH estimates that of those individuals, 6,791 are currently
being served. The services needed for this population include: detoxification
services, crisis services, intensive outpatient treatment, comprehensive outpatient
treatment, residential services, community support, and halfway houses.
7. Restructure the MH/ DD/ SA Trust Fund
G. S. 143- 15.3D1 creates the Trust Fund for Mental Health, Developmental
Disabilities, and Substance Abuse Services and Bridge Funding Needs ( Trust
Fund). It is an interest- bearing, nonreverting special trust fund in the Office of
State Budget and Management. Moneys in the Trust Fund are held in trust to be
used solely to meet the mental health, developmental disabilities, and substance
abuse services needs of the State. Any balance remaining in the Trust Fund at
the end of any fiscal year is carried forward in the Trust Fund for the next
succeeding fiscal year.
The Trust Fund only can be used for specified purposes. These are:
o Provide start- up funds and operating support for programs and
services that provide more appropriate and cost- effective community
treatment alternatives for individuals currently residing in the State's
institutions.
o Facilitate the State's compliance with the United States Supreme Court
decision in Olmstead v. L. C. and E. W.
o Facilitate reform of the mental health, developmental disabilities, and
substance abuse services system and expand and enhance treatment and
prevention services in these program areas to remove waiting lists and
provide appropriate and safe services for clients.
o Provide bridge funding to maintain appropriate client services during
transitional periods as a result of facility closings, including departmental
restructuring of services.
o Construct, repair, and renovate State mental health, developmental
disabilities, and substance abuse services facilities.
1 Effective July 1, 2007, G. S. 143- 15.3D is recodified as G. S. 143C- 9- 2.
20
DHHS has never developed a strategic plan for how the funds should be
spent. There is no specific process for applying for funds, or criteria ( other than
purpose) regarding how the funds may be spent. Six years into reform, over
$ 75,000,000 has been placed in the Trust Fund. However, under $ 43,000,000 ( or
less than sixty percent) had been expended. Of the funds expended by February
2007, over 20% were allocated to State- operated facilities.
8. Waivers/ Funding Flexibility
DMH has implemented a single stream funding project which allows it to
allocate state appropriations to selected LMEs without dividing the funding into
age and disability categories. This gives those LMEs much more flexibility to
fully utilize State funding to address community needs. Other LMEs continue to
express great interest in obtaining similar flexibility.
Piedmont Behavioral Healthcare has a MedicaidWaiver that allows it to
independently manage its Medicaid services and resources. This waiver gives
Piedmont Behavioral Healthcare the authority to create and manage its provider
network, manage rates, authorize services, and pay provider claims. Many
legislators and LOC members have expressed interest in expanding the Medicaid
waiver to include more LMEs.
9. Service Dollars for Mental Health
North Carolina ranked 45th nationally in mental health spending ($ 49.64 per
capita), 16th in spending for state mental hospitals ($ 34.68 per capita), and 49th
in spending for community- based programs ($ 14.96 per capita). 2 Two lower
states are New Mexico and Arkansas. Arkansas also does not include the
Medicaid data and New Mexico doesn t include children s mental health. North
Carolina ranked 43rd in per capita funding for mental health services nationally
in 2003 in Grading the States A Report on America s Health Care System for
Serious Mental Illness ( a study by the National Alliance for the Mentally Ill).
An additional $ 30 million per year for mental health services would increase
North Carolina s per capita spending on state- funded mental health services
from $ 17.36 to $ 20.43 per capita ( not factoring in any other proposed
appropriations).
2 These rankings only include funds controlled by the State Mental Health Agency. For
North Carolina, this does not include services paid for by Medicaid.
21
Because access to state- funded services is not an entitlement, LMEs lack
sufficient funds to provide adequate services to consumers. LMEs must choose
between serving more people with fewer services or serving fewer people with
more services. If LMEs paid for the same level of services as Medicaid for state-funded
services, it is estimated that only twenty- five percent ( 25%) of current
mental health patients would receive services.
Another indication of the lack of sufficient services to the mentally ill is the rise
in acute admissions to the State psychiatric hospitals. Since reform, hospital
populations have decreased, but admissions have increased and admissions are
increasing faster than population growth. Acute admissions ( persons who are
discharged in 30 days or less) have increased 22% from 2001 to 2005. Stays from
one to seven days have increased by 83% from 2001 to 2005.
10. Services to the Developmental Disabled
The LOC has heard that Sheltered Workshops, which the State currently funds,
are not an evidence- based practice, but that Supported Employment is. The LOC
has also made it a priority to serve individuals with developmental disabilities in
the community rather than institutions.
In 2006, CMS refused to approve Developmental Therapies ( previously known
as Community Based Services or CBS) as a Medicaid reimbursable service for the
developmentally disabled. The State moved to place as many persons as
possible on CAP- MR/ DD waivers and find other appropriate services. DMH
also recommended, and the General Assembly appropriated, $ 26 million to be
used to " replace services lost due to changes in federal policy and cuts in federal
support." It is not clear whether these funds were meant to " hold harmless"
individuals who had been receiving CBS or whether the funds were meant to
create a new service that is available regardless of whether a person had
previously been receiving CBS.
11. Implementation of New LME Administrative Cost Model and Additional
Funding Needed
S. L. 2006- 66, Section 10.32 directed DHHS to review and revise the LME
systems management cost model and to recalculate LME systems management
allocations for fiscal year 2006- 07. This calculation was to include funds for each
LME to implement 24- hour, seven- days- a- week screening, triage, and referral,
and to review, monitor, and comment on all person centered plans. The special
provision also required DHHS to develop a cost model that fully funded the core
LME functions outlined in G. S. 122C- 115.4( b).
22
DHHS has failed to request adequate funds to pay for local administrative
costs for the last three years, which has consistently resulted in shortfalls in the
DMH budget. In order to cover these shortfalls, in FY 2004- 05, DHHS
transferred $ 24,828,452 in funds from the Division of Medical Assistance to DMH
and used $ 5,130,144 in DMH funds appropriated to other areas. In FY 2005- 06,
DHHS transferred $ 15,502,332 from the Divisions of Aging, Public Health, and
Social Services to DMH and used $ 14,401,656 in DMH funds appropriated to
other areas. In FY 2006- 07, DMH cut $ 19,525,273 from services at the direction of
DHHS. In 2004 and 2005, DHHS failed to inform the General Assembly of the
existence or extent of the shortfall. In 2006, DHHS failed to inform the General
Assembly of the extent of the shortfall.
DMH presented a new LME Administrative Cost Model to the LOC in
November of 2006. The new model is based on the old LME Administrative
Cost Model with some adjustments in the cost categories. DMH informed the
LOC that the total cost is similar to the LME administrative cost for FY 2006- 07,
but will require an additional seventeen million two hundred sixty- seven
thousand three hundred eighty- six dollars ($ 17, 267,386) in state general funds to
be fully funded. DMH has recently increased that figure because it was
determined that the cost model did not provide full funding for LMEs to review,
monitor, and comment on all person centered plans. The new total needed is
$ 19, 200,000.
LMEs are not currently required to report how local funds are spent or collect
income data on consumers. This lack of information makes it difficult to
determine the extent of service gaps or the extent that some consumers might be
able to supplement the cost of their services.
12. Uniform Sliding Fee Schedule
G. S. 122C- 146 requires LMEs and their contractual agencies to prepare fee
schedules for services and make a reasonable effort to collect appropriate
reimbursement for costs from individuals or entities based upon ability to pay or
third- party payment. Funds collected from fees for LME operated services must
be used for the fiscal operation or capital improvements of the LME's programs.
A survey of LMEs by the Division during the fall of 2006 showed that there is
no uniformity across the State regarding these fee schedules. LMEs may or may
not use the same fee schedule for all services. Some look at gross income, others
do not. Some set an income floor below which no fee is charged, others do not.
All LMEs that reported on their sliding fee scale had a maximum income above
which no relief was provided. However, those maximum incomes ranged from
23
$ 7,200 to $ 99,000 for a family of one. A couple of LMEs charged for " no shows",
but the vast majority did not. Only one LME had a maximum monthly liability
limit.
A uniform fee schedule would ensure that consumers are treated consistently
across the State.
13. Clarify Screening, Triage, and Referral Roles
The purpose of the LME function of Screening, Triage and Referral ( STR) is to
gather basic demographic information about the consumer, determine whether
the consumer is target or non- target population, make a very broad initial
determination about the consumer's condition, and provide information
regarding providers who could assist the consumer.
In the spring of 2006, DMH and LMEs negotiated a memorandum of
agreement ( MOA) that outlined how STR should be handled. The MOA stated
that only LMEs would implement STR for both Medicaid and non- Medicaid
eligible consumers. The rational for this position was that LMEs needed to know
who was entering the system and this was the most efficient way for LMEs to
have that information. LMEs were also concerned about " self- referral" by the
providers conducting STR.
During the summer of 2006, the Division of Medical Assistance ( DMA) took
the position that private providers should be able to do STR for Medicaid eligible
consumers. DMA argued that this implemented the " no wrong door" policy of
the system and that when a consumer walks in the door of a private provider,
that consumer has already exercised his or her choice. LMEs objected to this
position, arguing that there was no mechanism for LMEs to know when a
Medicaid eligible consumer enters the system if the provider conducts STR.
Eventually, DMH, DMA and the LMEs negotiated a system by which a provider
must " register" a consumer with the LME within 5 days of the provider
conducting STR. While some LMEs were satisfied with this solution, others took
the position that the policy contradicted language adopted by the General
Assembly in 2006 that lists STR as a " core function" of LMEs. Those LMEs also
argued that the registration system would be inefficient.
It should be noted that the State and Medicaid provide administrative funds
for LMEs to conduct STR. However, STR is not a " service", therefore neither the
State nor Medicaid will pay providers for conducting STR. It is possible that as
more providers conduct STR, Medicaid will reduce its contribution to LME
24
administrative funding on the basis it is paying for a function LMEs are not
implementing.
The Secretary has been under a statutory obligation since 2001 to adopt rules
implementing a " uniform portal process". This term refers to how consumers
enter and exit the public system. Who is authorized to conduct STR is directly
related to the uniform portal process. The LOC co- chairs sent a letter to the
Secretary requesting that she suspend the policy until such time as rules could be
adopted. The Secretary took the issue to the State Consumer and Family
Advisory Council ( state CFAC) who supported the policy as being consumer
friendly. The Secretary has responded to the rules issue with a letter that
indicates that the General Assembly had tacitly given DHHS the authority to
adopt policies outside the rulemaking process. The Secretary has also proposed
a rule that would allow private providers to conduct STR for Medicaid
consumers. The Commission on Mental Health, Developmental Disabilities and
Substance Abuse Services passed a resolution in February of 2007, stating that
the proposed rule conflicts with the policies in G. S. 122C- 115.4( b) and requesting
that the Secretary withdraw the rule.
14. First Commitment Pilot Program
Session Law 2003- 178 authorized the Secretary to temporarily waive certain
statutory requirements pertaining to initial ( first- level) examinations conducted
as part of the involuntary commitment process. Current law requires that first-level
examinations be conducted by either a physician or eligible PhD- level
psychologist. The temporary waiver allowed the Secretary to approve LME
requests to substitute appropriately trained licensed clinical social workers,
masters level psychiatric nurses, or masters level certified clinical addictions
specialists to conduct first- level examinations. The Secretary could grant waivers
to up to five LMEs for periods of time not to exceed three years and required that
participating LMEs, " assure that a physician is available at all times to provide
backup support to include telephone consultation and face- to- face evaluation, if
necessary."
The Secretary approved the following five LMEs to participate in the pilot
program: CenterPoint Human Services, Crossroads Behavioral Healthcare,
Pathways MH/ DD/ SAS, Smoky Mountain Center, and Piedmont Behavioral
Healthcare. DMH delivered a report to the LOC on the " effectiveness, quality,
and efficiency" of services provided under the waiver. The report recommended
that the change be extended state wide and made permanent. However, the vast
majority of the data in the report came from a single LME, making it difficult to
draw broad conclusions about the program.
25
COMMITTEE CONCLUSIONS
The Legislative Oversight Committee on Mental Health, Developmental
Disabilities, and Substance Abuse Services makes the following four
recommendations to the 2007 General Assembly. Each proposal is followed by a
bill draft.
1. That the General Assembly enact comprehensive legislation to build the
necessary services ( infrastructure) at the community level to begin to
address the system's needs.
2. That DHHS adopt a uniform sliding fee schedule.
3. That the General Assembly extend the First Commitment Pilot Program
and clarify that only LMEs may conduct LME core functions.
4. That the General Assembly adopt legislation requiring all health insurers
to provide health insurance coverage for the treatment of mental illness
and substance abuse. The coverage shall be subject to the same benefits
and limitations as the coverage provided for all other covered conditions.
Note: Recommendations 1- 3 above are outlined in greater detail in the
following pages. Each proposal is accompanied by draft legislation.
26
LEGISLATIVE PROPOSAL # 1
BUILD COMMUNITY INFRASTRUCTURE
27
LEGISLATIVE PROPOSAL # 1
A RECOMMENDATION OF THE LEGISLATIVE OVERSIGHT
COMMITTEE FOR MH/ DD/ SA
TO THE 2007 GENERAL ASSEMBLY
AN ACT TO BUILD COMMUNITY INFRASTRUCTURE FOR
MENTALHEALTH, DEVELOPMENTALDISABILITIES AND
SUBSTANCE ABUSE SERVICES, AS RECOMMENDED BY
THE JOINT LEGISLATIVE OVERSIGHT COMMITTEE
Short Title: Build Community Infrastructure MH/ DD/ SA
Brief Overview: This bill would appropriate one hundred thirty- five million,
forty- two thousand, forty- eight dollars ($ 135,042,048) for Fiscal Year 2007- 08
and one hundred thirty- four million, seven hundred seventy- seven thousand,
six hundred forty- seven dollars ($ 134,777,647) for Fiscal Year 2008- 09 to build
community infrastructure for mental health, developmental disabilities, and
substance abuse services. All funds distributed to LMEs are to be allocated by
DHHS as a percentage of the total allocation that is equal to the LME's
percentage of the State's total population that is below the federal poverty
level.
The bill directs the following action and appropriates funds as provided:
Part 1. Funds for Substance Abuse Treatment Programs
$ 10,000,000 for FY 2007- 08 and $ 5,000,000 for FY 2008- 09 from the General
Fund to DHHS to be allocated to LMEs for the purpose of operational
start up, capital, or subsidies related to the creation of residential or
outpatient Substance Abuse Treatment Programs. The LME would
determine program needs and would be allowed to work in conjunction
with other LMEs to address regional needs.
$ 500,000 for FY 2007- 08 and $ 500,000 for FY 2008- 09 from the General
Fund to the North Carolina Area Health Education Centers to provide
technical assistance to LMEs in the identification and implementation of
substance abuse treatment programs.
28
Amends G. S. 122C- 147.1 to include language providing funds for
substance abuse services be appropriated in a broad disability category,
thereby removing the age categories.
Directs the Secretary to develop and implement a system to track funds
expended by LMEs on a grant basis ( single stream funding) for each
disability and age/ disability category and that identifies specific services
purchased with funds.
Allows LMEs to use up to 1% of funds allocated to provide nominal
incentives for substance abuse service consumers that meet specific
treatment benchmarks
Encourages LMEs to use funds for prevention and education.
$ 4,000,000 for FY 2007- 08 and $ 4,000,000 for FY 2008- 09 from the General
Fund to DHHS to provide substance abuse treatment services and case
management for existing pre- and post- plea drug treatment courts.
Part 2. Additional Housing Assistance
Independent- and Supportive- Living Apartments Initiative:
$ 5,250,000 FY 2007- 08 and FY 2008- 09 to DHHS for additional operating
cost subsidies for an estimated 1,000 independent- and supportive- living
apartments for individuals with MH/ DD/ SA disabilities.
Directs DHHS to maximize the number of subsidies that it can pay for
with these funds by first giving priority to NCHFA- financed apartments,
giving second priority to other publicly subsidized apartments, and finally
to market- rate apartments. The apartments shall be made affordable to
individuals with incomes at or below the SSI level. Up to $ 250,000 can be
used for administration of the subsidies.
$ 10,000,000 FY 2007- 08 and FY 2008- 09 to the North Carolina Housing
Trust Fund of the North Carolina Housing Finance Agency ( NCHFA) to
finance independent- and supportive- living apartments for individuals
with MH/ DD/ SA disabilities. These funds can be used to continue the
current Housing 400 Initiative as currently operated.
Requires DHHS and NCHFA to work together to plan the most efficient
and effective use of state resources in the financing and construction of
additional independent- and supportive- living apartments for individuals
with MH/ DD/ SA disabilities.
29
Support Proposals Regarding Mentally Ill in Adult Care Homes:
Directs DHHS to develop a " Transitional Residential Treatment Program"
to provide 24- hour residential treatment and rehabilitation for adults who
have a pattern of difficult behaviors related to mental illness and which
exceed the capabilities of traditional community residential settings.
Directs DHHS to complete a Uniform Screening Tool and notify LMEs of
the mental illness status of any individual admitted to a long- term care
facility within the LME's catchment area.
Authorizes DHHS to increase the maximum number of assignments to the
special assistance in- home program to 2,000 persons.
Reauthorizes the joint ad hoc Subcommittee on Adult Care Home
Residents with Mental Illness to continue its study on identifying rules
and laws to regulate facilities that provide housing for adults with mental
illness in the same location as adults without mental illness.
Part 3. Crisis and Acute Care Services
Expand Crisis Services:
$ 10,000,000 for FY 2007- 08 and $ 5,000,000 for FY 2008- 09 from the General
Fund to DHHS to be allocated to LMEs to continue to implement the crisis
plans developed under S. L. 2006- 66 Section 10.26. $ 250,000 to extend the
contract with the existing crisis services consultant.
$ 15,000,000 for FY 2007- 08 and $ 20,000,000 for FY 2008- 09 from the
General Fund to DHHS to be allocated to LMEs to continue increasing the
crisis services available around the State.
Requires LMEs to make crisis services available to all age and disability
groups, but directs DMH to cease allocating crisis service funds according
to those categories.
Directs DHHS to develop a system for reporting on crisis visits to
community hospital emergency departments.
State Psychiatric Hospital Utilization Pilot:
$ 5,000,000 for FY 2007- 08 and FY 2008- 09 to be used by selected LMEs to
provide crisis services as part of a pilot program to increase community
resources for persons with mental illness and to reduce acute admissions
to State psychiatric hospitals.
30
Part 4. Assistance to Law Enforcement
Services to Persons in Jail:
Directs LMEs to work with public health departments and County Sheriffs
to provide assessments and medications for suicidal, hallucinating or
delusional inmates in county jails.
Directs that the LMEs, county Public Health Departments, and County
Sheriffs to work together to develop standardized mental health screening
tools, protocols, and training related to persons in jails.
$ 1,000,000 for FY 2007- 08 and FY 2008- 09 for LMEs to provide the
assistance described above.
$ 900,000 for FY 2007- 08 and $ 1,800,000 for FY 2008- 09 from the General
Fund to DHHS for 15 additional jail diversion programs, expanding jail
diversion to all counties.
Crisis Intervention Teams:
$ 100,000 for FY 2007- 08 and FY 2008- 09 from the General Fund to DHHS
for technical assistance and training of Crisis Intervention Teams.
Post- Conviction Substance Abuse Treatment Programs:
$ 4,080,000 for FY 2007- 08 and $ 8,160,000 for FY 2008- 09 from the General
Fund to DHHS for 68 additional care managers per year for the Treatment
Accountability for Safer Communities ( TASC) program to cover all known
substance abuse offenders eligible for the program.
$ 1,412,048 for FY 2007- 08 and $ 1,167,647 for FY 2008- 09 from the General
Fund for to the Department of Correction to establish a community- based,
residential substance abuse treatment facility for female offenders on
probation and female DWI offenders paroled to treatment.
Part 5. Restructure theMH/ DD/ SA Trust Fund
Repeals language in G. S. 143C- 9- 2 that allows Trust Fund money to be
used to construct, repair, and renovate State mental health, developmental
disabilities, and substance abuse services facilities.
Requires funds remaining in the Trust fund that are not obligated as of
February 1, 2007, to only be obligated to provide community based
programs.
31
Part 6. Strengthen Services Network
Requires DMH to implement an application process that would allow up
to four additional LMEs to be considered for the single stream funding
process. If the designation is not made by June 1, 2007, the General
Assembly would make the designation.
Directs DMH to study the effectiveness of Piedmont Behavioral
Healthcare s Medicaid Waiver and requires the Secretary to commence the
process for three additional LMEs to apply for the waiver.
Part 7. Filling Service Gaps
Additional Service Dollars for Mental Health:
$ 30,000,000 for FY 2007- 08 and FY 2008- 09 from the General Fund to
DHHS to be allocated to LMEs for the purchase mental health services.
Additional Services for the Developmental Disabilities:
$ 7,000,000 for FY 2007- 08 and FY 2008- 09 for start- up and ongoing support
of Supported Employment services.
$ 9,900,000 for FY 2007- 08 and for FY 2008- 09 for an additional 660 slots in
the Community Alternatives Program for Mental Retardation /
Developmental Disabilities ( CAP- MR/ DD).
Beginning July 1, 2007, developmental therapies will only be available for
participants who are receiving these services on June 30, 2007.
Community Supports/ Tiered Rate Structure:
Directs DHHS to establish at least three rate tiers for the service of
Community Supports.
Part 8. LME Administrative Funding
$ 19,200,000 for FY 2007- 08 and FY 2008- 09 from the General Fund to
DHHS the purpose to fully funding the LME cost model.
Requires LMEs to report to DMH on all services provided ( including
services provided with county funds), income data of all consumers, and
32
on non- UCR spending. The data shall be reported by service and by
disability, and shall include information regarding any services to
Medicaid eligible consumers that are being augmented with State funds.
DMH and the LMEs shall develop a method of reporting on services
delivered with non- UCR funding that allows DMH to measure outcomes
achieved with the use of the funds and also allows more funding to be
used on a non- UCR basis.
$ 1,700,000 for FY 2007- 08 and FY 2008- 09 from the General Fund to DHHS
to be used by the LMEs to pay for the cost of the additional reporting
requirements.
Effective Date: This bill would become effective July 1, 2007.
A copy of the proposed legislation begins on the next page
33
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2007
U D
BILL DRAFT 2007- RCz- 1 [ v. 18] ( 01/ 24)
( THIS IS A DRAFT AND IS NOT READY FOR INTRODUCTION)
3/ 8/ 2007 10: 02: 31 AM
Short Title: Build Community Infrastructure - MH/ DD/ SA. ( Public)
Sponsors: .
Referred to:
1
2 A BILL TO BE ENTITLED
3 AN ACT TO BUILD COMMUNITY INFRASTRUCTURE FOR MENTAL HEALTH,
4 DEVELOPMENTAL DISABILITIES AND SUBSTANCE ABUSE SERVICES
5 AND TO APPROPRIATE FUNDS AS RECOMMENDED BY THE JOINT
6 LEGISLATIVE OVERSIGHT COMMITTEE.
The General Assembly of North Carolina enacts: 78
9 PART I. INCREASE AVAILABILITY OF SUBSTANCE ABUSE TREATMENT.
10
11 START- UP FUNDING FOR SUBSTANCE ABUSE TREATMENT PROGRAMS.
12 SECTION 1.1. There is appropriated from the General Fund to the
13 Department of Health and Human Services ( DHHS), Division of Mental Health,
14 Developmental Disabilities and Substance Abuse Services ( DMH), the sum of ten
15 million dollars ($ 10,000,000) for the 2007- 2008 fiscal year and the sum of five million
16 ($ 5,000,000) for the 2008- 2009 fiscal year. DHHS shall distribute the funds no later
17 than 30 days after the enactment of the Current Operations and Capital Appropriations
18 Act for the 2007- 2009 biennium.
19 Funds appropriated in this Section shall be allocated to local management
20 entities ( LMEs) such that each LME receives a percentage of the total allocation that is
21 equal to that local management entity's percentage of the State's total population that is
22 below the federal poverty level. LMEs shall use the funds for operational start- up,
23 capital, or subsidies related to the creation of both residential and outpatient substance
24 abuse treatment programs. Each LME shall determine the type of substance abuse
25 treatment programs that are needed in that LME's catchment area, issue requests for
26 proposals for the creation of those programs, and award funds for appropriate proposals.
34
LMEs may work 1 together to identify regional needs and may also issue combined
2 requests for proposals to create regional substance abuse treatment programs. LMEs
3 shall distribute funds appropriated under this section no later than six months after the
4 funds are distributed to LMEs by DHHS, and in no event later than June 30, 2008.
5 SECTION 1.2. There is appropriated from the General Fund to the North
6 Carolina Area Health Education Centers ( AHEC), the sum of five hundred thousand
7 dollars ($ 500,000) for the 2007- 2008 fiscal year and the sum of five hundred thousand
8 dollars ($ 500,000) for the 2008- 2009 fiscal year. AHEC shall use the funds to provide
9 technical assistance to LMEs in the identification of substance abuse treatment program
10 needs in the LMEs' catchment areas, the development of requests for proposals, and
11 oversight and accountability for the implementation of substance abuse treatment
12 programs. AHEC shall make recommendations to the Joint Legislative Oversight
13 Committee on Mental Health, Developmental Disabilities and Substance Abuse
14 Services by February 1, 2009, and October 1, 2010, regarding whether there is a need
15 for additional funds for substance abuse start- up and services.
16
17 SUBSTANCE ABUSE TREATMENT SERVICES AND PREVENTION.
18 SECTION 1.3. G. S. 122C- 147.1 reads as rewritten:
19 " § 122C- 147.1. Appropriations and allocations.
20 ( a) Except as provided in subsection ( b) of this section, funds for services
21 delivered to mentally ill and developmentally disabled clients shall be appropriated by
22 the General Assembly in broad age/ disability categories. Funds for services delivered to
23 substance abuse clients shall be appropriated by the General Assembly in a broad
24 disability category. The Secretary shall allocate and account for funds in broad
25 disability or age/ disability categories so that the area authority LME may, with
26 flexibility, earn funds in response to local needs that are identified within the payment
27 policy developed in accordance with G. S. 122C- 143.1( b).
28 ( b) When the General Assembly determines that it is necessary to appropriate
29 funds for a more specific purpose than the broad disability or age/ disability category,
30 the Secretary shall determine whether expenditure accounting, special reporting within
31 earning from a broad fund, the Memorandum of Agreement, or some other mechanism
32 allows the best accounting for the funds.
33 ( c) Funds that have been appropriated by the General Assembly for a more
34 specific purpose than specified in subsection ( a) of this section shall be converted to a
35 broad disability or age/ disability category at the beginning of the second biennium
36 following the appropriation, unless otherwise acted upon by the General Assembly.
37 ( d) The Secretary shall allocate funds to area programs: LMEs as follows:
38 ( 1) To be earned in a purchase of service basis, at negotiated
39 reimbursement rates, for services that are included in the payment
40 policy and delivered to mentally ill, ill and developmentally disabled,
41 and substance abuse disabled clients and for services that are included
42 in the payment policy to other recipients; or recipients.
35
1 ( 2) To be paid under a grant on the basis of agreed- upon expenditures,
2 when the Secretary determines that it would be impractical to pay on a
3 purchase of service basis. expenditures.
4 ( d1) The Secretary shall allocate funds to LMEs for services to substance abuse
5 clients. Notwithstanding subsection ( d) of this section, each LME shall determine
6 whether to earn the funds for services to substance abuse clients in a purchase for
7 service basis, under a grant, or some combination of the two.
8 ( d2) No later than November 1, 2007, the Secretary shall develop and implement a
9 system that LMEs shall use to track the funds each LME expends on a grant basis for
10 each disability and for each age/ disability category and that identifies the specific
11 services purchased with the funds.
12 ( e) After the close of a fiscal year, final payments of funds shall be made: made
13 as follows:
14 ( 1) Under the purchase of service basis, on the earnings of the area
15 authority LME for the delivery to individuals within each
16 age/ disability group, of any services that are consistent with the
17 payment policy established in G. S. 122C- 143.1( b), up to the final
18 allocation amount; oramount.
19 ( 2) When awarded on an expenditure basis, on allowable actual
20 expenditures, up to the final allocation amount.
21 ( e1) Under rules adopted by the Secretary, final payments made under subsection
22 ( e) of this section shall be adjusted on the basis of the audit required in
23 G. S. 122C- 144.1( d)."
24 SECTION 1.4. Consistent with G. S. 122C- 2, the General Assembly strongly
25 encourages LMEs to use a portion of the funds appropriated for substance abuse
26 treatment services to support prevention and education activities.
27 SECTION 1.5. An LME may use up to one percent ( 1%) of funds allocated
28 to it for substance abuse treatment services to provide nominal incentives for consumers
29 who achieve specified treatment benchmarks.
30
31 DRUG TREATMENT COURTS.
32 SECTION 1.6. There is appropriated from the General Fund to the to the
33 Department of Health and Human Services ( DHHS), Division of Mental Health,
34 Developmental Disabilities and Substance Abuse Services the sum of four million
35 dollars ($ 4,000,000) for the 2007- 2008 fiscal year and the sum of four million dollars
36 ($ 4,000,000) for the 2008- 2009 fiscal year. The funds shall be used to provide
37 substance abuse treatment services and case management for existing pre- and post- plea
38 Adult Drug Treatment Courts, DWI Treatment Courts, Youth Drug Treatment Courts,
39 Mental Health Treatment Courts and Family Drug Treatment Courts.
40
41 PART II. ADDITIONAL HOUSING ASSISTANCE
42
43 INDEPENDENT- AND SUPPORTIVE- LIVING APARTMENTS INITIATIVE
36
1 SECTION 2.1 There is appropriated from the General Fund to the
2 Department of Health and Human Services ( DHHS) the sum of five million two
3 hundred fifty thousand dollars ($ 5,250,000) for the 2007- 2008 fiscal year and the sum
4 of five million two hundred fifty thousand dollars ($ 5,250,000) for the 2008- 2009 fiscal
5 year. The funds shall be used to pay for operating cost subsidies for approximately one
6 thousand ( 1,000) independent- and supportive- living apartments for individuals with
7 mental health, developmental, or substance abuse disabilities. DHHS shall maximize
8 the number of subsidies that can be paid for with these funds by giving first priority to
9 North Carolina Housing Finance Agency- financed apartments, giving second priority to
10 other publicly subsidized apartments, and third priority to market- rate apartments. Up
11 to two hundred fifty thousand dollars ($ 250,000) may be used for administration of the
12 subsidies.
13 SECTION 2.2. There is appropriated from the General Fund to the North
14 Carolina Housing Trust Fund the sum of ten million dollars ($ 10,000,000) for the
15 2007- 2008 fiscal year and the sum of ten million dollars ($ 10,000,000) for the
16 2008- 2009 fiscal year. The funds shall be used to finance independent- and
17 supportive- living apartments for individuals with mental health, developmental, or
18 substance abuse disabilities. The funds shall be used to continue and expand the
19 Housing 400 Initiative created in 2006.
20 SECTION 2.3. The independent and supportive living apartments for
21 persons with disabilities constructed from funds appropriated in this act for that purpose
22 shall be affordable to persons with incomes at or below the Supplemental Security
23 Income ( SSI) level.
24 SECTION 2.4. The Department of Health and Human Services and the
25 North Carolina Housing Finance Agency shall work together to develop a plan for the
26 most efficient and effective use of State resources in the financing and construction of
27 additional independent- and supportive- living apartments for individuals mental health,
28 developmental, or substance abuse disabilities. This plan shall address gaps in the
29 housing continuum identified by the study that DHHS will conduct during SFY 2006- 07
30 and SFY 2007- 08. DHHS and NCHFA shall report this plan and also the progress of
31 the Housing 400 Initiative to the Joint Legislative Oversight Committee on Mental
32 Health, Developmental Disabilities and Substance Abuse Services by March 1, 2008.
33
34 SUPPORT PROPOSALS REGARDING MENTALLY ILL IN ADULT CARE
35 HOMES.
36 SECTION 2.5. The Department of Health and Human Services shall
37 develop a " Transitional Residential Treatment Program" service definition to provide
38 24- hour residential treatment and rehabilitation for adults who have a pattern of difficult
39 behaviors related to mental illness and which exceed the capabilities of traditional
40 community residential settings. DHHS shall submit the new service definition to the
41 Centers for Medicare and Medicaid for approval no later than 90 days after the
42 enactment of the Current Operations and Capital Appropriations Act for the 2007- 2009
43 biennium.
37
1 SECTION 2.6. The joint ad hoc subcommittee regarding the mentally ill in
2 adult care homes convened by the Joint Legislative Oversight Committee on Mental
3 Health, Developmental Disabilities and Substance Abuse Services and the North
4 Carolina Commission on Aging may continue to study and identify rules and laws that
5 are necessary to regulate facilities that provide housing for adults with mental illness in
6 the same location with adults without mental illness.
7 SECTION 2.7. The Department of Health and Human Services shall
8 complete the development of a Uniform Screening Tool ( UST) to be used by LMEs to
9 determine the mental health of any individual admitted to any long term care facility
10 within an LME's catchment area. The UST shall be available for use no later than 90
11 days after the enactment of the Current Operations and Capital Appropriations Act for
12 the 2007- 2009 biennium.
13 SECTION 2.8. The Department of Health and Human Services shall make
14 available placements for at least two thousand ( 2,000) adults through the State/ County
15 Special Assistance In- Home Program. LMEs shall be responsible for the delivery of
16 case management for recipients who have a mental illness, developmental disability, or
17 substance abuse disorder and are within the target populations for those disabilities.
18
19 PART III. CRISIS AND ACUTE CARE SERVICES
20
21 EXPAND CRISIS SERVICES
22 SECTION 3.1. There is appropriated from the General Fund to the
23 Department of Health and Human Services, Division of Mental Health, Developmental
24 Disabilities, and Substance Abuse Services, the sum of ten million dollars
25 ($ 10,000,000) for the 2007- 2008 fiscal year and the sum of five million dollars
26 ($ 5,000,000) for the 2008- 2009 fiscal year. LMEs shall use these funds to continue to
27 implement the crisis plans developed under S. L. 2006- 66, Section 10.26. DHHS may
28 use up to two hundred fifty thousand dollars ($ 250,000) of the funds appropriated under
29 this Section to extend its contract with the crisis services consultant authorized under
30 Section 10.26( b) of S. L. 2006- 66.
31 SECTION 3.2. S. L. 2006- 66, Section 10.26( d) reads as rewritten:
32 " SECTION 10.26.( d) With the assistance of the consultant, the area
33 authorities and county programs LMEs within a crisis region shall work together to
34 identify gaps in their ability to provide a continuum of crisis services for all consumers
35 and use the funds allocated to them to develop and implement a plan to address those
36 needs. At a minimum, the plan must address the development over time of the following
37 components: 24- hour crisis telephone lines, walk- in crisis services, mobile crisis
38 outreach, crisis respite/ residential services, crisis stabilization units, 24- hour beds,
39 facility- based crisis, in- patient crisis, detox, and transportation. Options for voluntary
40 admissions to a secured facility must include at least one service appropriate to address
41 the mental health, developmental disability, and substance abuse needs of adults, and
42 the mental health, developmental disability, and substance abuse needs of children.
43 Options for involuntary commitment to a secured facility must include at least one
44 option in addition to admission to a State facility.
38
1 If all area authorities and county programs LMEs in a crisis region determine
2 that a facility- based crisis center is needed and sustainable on a long- term basis, the
3 crisis region shall first attempt to secure those services through a community hospital or
4 other community facility. If all the area authorities and county programsLMEs in the
5 crisis region determine the region's crisis needs are being met, the area authorities and
6 county programsLMEs may use the funds to meet local crisis service needs."
7 SECTION 3.3. There is appropriated from the General Fund to the
8 Department of Health and Human Services, Division of Mental Health, Developmental
9 Disabilities, and Substance Abuse Services, the sum of fifteen million dollars
10 ($ 15,000,000) for the 2007- 2008 fiscal year and the sum of twenty million dollars
11 ($ 20,000,000) for the 2008- 2009 fiscal year to be used to provide crisis services.
12 Funds appropriated in this Section shall be allocated to local management
13 entities ( LMEs) such that each LME receives a percentage of the total allocation that is
14 equal to that LME's percentage of the State's total population that is below the federal
15 poverty level. DHHS shall distribute the funds no later than 30 days after the enactment
16 of the Current Operations and Capital Appropriations Act for the 2007- 2009 biennium.
17 LMEs shall work with sheriffs and county public health agencies to serve individuals
18 who are incarcerated or being held in county jails and who are in need of crisis services.
19 SECTION 3.4. G. S. 122C- 147.1, as amended by Section 1.3 of this act reads
20 as rewritten:
21 " § 122C- 147.1. Appropriations and allocations.
22 ( a) Except as provided in subsection ( b) of this section, funds for services
23 delivered to mentally ill and developmentally disabled clients shall be appropriated by
24 the General Assembly in broad age/ disability categories. Funds for services delivered to
25 substance abuse clients shall be appropriated by the General Assembly in a broad
26 disability category. The Secretary shall allocate and account for funds in broad
27 disability or age/ disability categories so that the LME may, with flexibility, earn funds
28 in response to local needs that are identified within the payment policy developed in
29 accordance with G. S. 122C- 143.1( b).
30 ( b) When the General Assembly determines that it is necessary to appropriate
31 funds for a more specific purpose than the broad disability or age/ disability category,
32 the Secretary shall determine whether expenditure accounting, special reporting within
33 earning from a broad fund, the Memorandum of Agreement, or some other mechanism
34 allows the best accounting for the funds.
35 ( b1) Notwithstanding subsection ( b) of this section, funds appropriated by the
36 General Assembly for crisis services shall not be allocated in broad disability or
37 age/ disability categories.
38 ( c) Funds that have been appropriated by the General Assembly for a more
39 specific purpose than specified in subsection ( a) of this section shall be converted to a
40 broad disability or age/ disability category at the beginning of the second biennium
41 following the appropriation, unless otherwise acted upon by the General Assembly.
42 This subsection shall not apply to funds appropriated by the General Assembly for crisis
43 services.
44 ( d) The Secretary shall allocate funds to LMEs as follows:
39
( 1) 1 To be earned in a purchase of service basis, at negotiated
2 reimbursement rates, for services that are included in the payment
3 policy and delivered to mentally ill and developmentally disabled
4 clients and for services that are included in the payment policy to other
5 recipients.
6 ( 2) To be paid under a grant on the basis of agreed- upon expenditures.
7 ( d1) The Secretary shall allocate funds to LMEs for crisis services and services to
8 substance abuse clients. Notwithstanding subsection subsections ( b) and ( d) of this
9 section, each LME shall determine whether to earn the funds for crisis services and
10 funds for services to substance abuse clients in a purchase for service basis, under a
11 grant, or some combination of the two.
12 ( d2) No later than November 1, 2007, the Secretary shall develop and implement a
13 system that LMEs shall use to track the funds each LME expends on a grant basis for
14 each disability and for each age/ disability category and that identifies the specific
15 services purchased with the funds.
16 ( e) After the close of a fiscal year, final payments of funds shall be made as
17 follows:
18 ( 1) Under the purchase of service basis, on the earnings of the LME for
19 the delivery to individuals within each age/ disability group, of any
20 services that are consistent with the payment policy established in
21 G. S. 122C- 143.1( b), up to the final allocation amount.
22 ( 2) When awarded on an expenditure basis, on allowable actual
23 expenditures, up to the final allocation amount.
24 ( e1) Under rules adopted by the Secretary, final payments made under subsection
25 ( e) of this section shall be adjusted on the basis of the audit required in
26 G. S. 122C- 144.1( d)."
27 SECTION 3.5. The Department of Health and Human Services shall
28 develop a system for reporting to LMEs information regarding all visits to community
29 hospital emergency departments by individuals who are in crisis due to a mental illness,
30 a developmental disability or a substance abuse disorder. The system shall be
31 implemented no later than 90 days after the enactment of the Current Operations and
32 Capital Appropriations Act for the 2007- 2009 biennium.
33
34 STATE PSYCHIATRIC HOSPITAL – UTILIZATION PILOT
35 SECTION 3.6. In addition to the crisis service funds appropriated under
36 Section 3.3 of this act, there is appropriated from the General Fund to the Department of
37 Health and Human Services, Division of Mental Health, Developmental Disabilities,
38 and Substance Abuse Services, the sum of five million dollars ($ 5,000,000) for the
39 2007- 2008 fiscal year and the sum of five million dollars ($ 5,000,000) for the 2008-
40 2009 fiscal year to be used by selected LMEs to provide crisis services as part of a pilot
41 program to increase community resources for persons with mental illness and to reduce
42 acute admissions to State psychiatric hospitals. LMEs that have at least one of all of the
43 following shall be eligible to use the funds appropriated under this section: mobile
44 crisis team, facility- based crisis unit, walk- in facility, and a contract with a community
40
hospital for 1 inpatient beds for involuntary commitments. An LME that participates in
2 this pilot program during the 2007- 2008 fiscal year shall be eligible to participate in the
3 program during the 2008- 2009 fiscal year if the LME can document a reduction in the
4 involuntary commitment admissions from that LME's catchment area to the State
5 psychiatric hospital that serves that catchment area during the 2007- 2008 fiscal year.
6 The budgets for the State psychiatric hospitals shall not be reduced during the 2007-
7 2008 fiscal year as a result of this pilot. However, those budgets shall be adjusted in
8 following years to reflect the previous year's use by the LMEs participating in the pilot
9 program.
10
11 PART IV. ASSISTANCE TO LAW ENFORCEMENT
12
13 SERVICES TO PERSONS IN JAIL
14 SECTION 4.1. Local Management Entities shall work with County Public Health
15 departments and County Sheriffs to provide medical assessments and medication, if
16 appropriate, for inmates housed in county jails who are suicidal, hallucinating or
17 delusional. LMEs shall also examine ways to provide additional treatment to persons
18 who are determined to be psychotic, severely depressed, suicidal, or who have
19 substance abuse disorders. LMEs, County Public Health departments and County
20 Sheriffs shall work together to develop all of the following:
21 ( 1) A standardized evidence- based screening instrument to be used when
22 offenders are booked.
23 ( 2) A designated LME employee who is responsible for screening the daily jail
24 booking log for known mental health consumers.
25 ( 3) Protocols for effective communication between the LME and the jail staff
26 including collaborative development of medication management protocols between the
27 jail staff and the mental health providers.
28 ( 4) Training to help detention officers recognize signals of mental illness.
29 There is appropriated from the General Fund to the Department of Health and
30 Human Services ( DHHS), Division of Mental Health, Developmental Disabilities and
31 Substance Abuse Services ( DMH), the sum of one million dollars ($ 1,000,000) for the
32 2007- 2008 fiscal year and the sum of one million ($ 1,000,000) for the 2008- 2009 fiscal
33 year. Funds appropriated in this Section shall be allocated to local management entities
34 ( LMEs) such that each LME receives a percentage of the total allocation that is equal to
35 that local management entity's percentage of the State's total population that is below
36 the federal poverty level. LMEs shall use the funds to provide the assistance required
37 under this Section.
38 SECTION 4.2. There is appropriated from the General Fund to the
39 Department of Health and Human Services, Division of Mental Health, Developmental
40 Disabilities, and Substance Abuse Services the sum of nine hundred thousand dollars
41 ($ 900,000) for the 2007- 2008 fiscal year and the sum of one million eight hundred
42 thousand dollars ($ 1,800,000) for the 2008- 2009 fiscal year. The funds shall be used by
43 LMEs to expand post- arrest jail diversion programs. The funds would expand the
44 program by fifteen ( 15) programs each year.
41
1
2 CRISIS INTERVENTION TEAMS
3 SECTION 4.3. There is appropriated from the General Fund to the
4 Department of Health and Human Services, Division of Mental Health, Developmental
5 Disabilities, and Substance Abuse Services the sum of one hundred thousand dollars
6 ($ 100,000) for the 2007- 2008 fiscal year and the sum of one hundred thousand dollars
7 ($ 100,000) for the 2008- 2009 fiscal year. The funds shall be used by LMEs to develop
8 Crisis Intervention Teams ( CITs) statewide. The Division shall develop the ability to
9 provide training within North Carolina.
10
11 POST- CONVICTION SUBSTANCE ABUSE TREATMENT PROGRAMS
12 SECTION 4.4. There is appropriated from the General Fund to the
13 Department of Health and Human Services, Division of Mental Health, Developmental
14 Disabilities, and Substance Abuse Services the sum of four million eighty thousand
15 dollars ($ 4,080,000) for the 2007- 2008 fiscal year and the sum of eight million one
16 hundred sixty thousand dollars ($ 8,160,000) for the 2008- 2009 fiscal year. The funds
17 shall be used to increase the number of TASC ( Treatment Alternative for Safer
18 Communities) case managers by sixty- eight per year.
19 SECTION 4.5 There is appropriated from the General Fund to the
20 Department of Correction the sum of one million four hundred twelve thousand, forty-21
eight dollars ($ 1,412,048) for the 2007- 2008 fiscal year, and the sum of one million one
22 hundred sixty- seven thousand six hundred forty- seven dollars ($ 1,167,647) for the
23 2008- 2009 fiscal year. These funds shall be used to establish a community- based
24 residential substance abuse treatment facility for female offenders on probation and
25 female DWI offenders paroled to treatment. The facility shall provide thirty 90- day
26 therapeutic beds and twenty 28- day short term treatment beds.
27
28 PART V. USE OF MENTAL HEALTH TRUST FUNDS
29 SECTION 5.1. Funds remaining in the Trust Fund for Mental Health,
30 Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs
31 that are not obligated as of February 1, 2007, may only be obligated to provide
32 community- based programs. Any funds not obligated as of February 1, 2007 and not
33 subsequently obligated to provide community- based programs shall be deemed to be
34 unencumbered and shall be allocated to local management entities ( LMEs) such that
35 each LME receives a percentage of the total allocation that is equal to that local
36 management entity's percentage of the State's total population that is below the federal
37 poverty level. DHHS shall distribute the funds no later than 30 days after the enactment
38 of the Current Operations and Capital Appropriations Act for the 2007- 2009 biennium.
39 SECTION 5.2. Effective July 1, 2007, G. S. 143C- 9- 2 reads as rewritten:
40 " § 143C- 9- 2. Trust Fund for Mental Health, Developmental Disabilities, and
41 Substance Abuse Services and Bridge Funding Needs.
42 ( a) The Trust Fund for Mental Health, Developmental Disabilities, and
43 Substance Abuse Services and Bridge Funding Needs is established as an
44 interest- bearing, nonreverting special trust fund in the Office of State Budget and
42
Management. Moneys in the Trust 1 Fund shall be held in trust and used solely to increase
2 community- based services that meet the mental health, developmental disabilities, and
3 substance abuse services needs of the State. The Trust Fund shall be used to supplement
4 and not to supplant or replace existing State and local funding available to meet the
5 mental health, developmental disabilities, and substance abuse services needs of the
6 State.
7 The State Treasurer shall hold the Trust Fund separate and apart from all other
8 moneys, funds, and accounts. The State Treasurer shall be the custodian of the Trust
9 Fund and shall invest its assets in accordance with G. S. 147- 69.2 and G. S. 147- 69.3.
10 Investment earnings credited to the assets of the Trust Fund shall become part of the
11 Trust Fund. Any balance remaining in the Trust Fund at the end of any fiscal year shall
12 be carried forward in the Trust Fund for the next succeeding fiscal year.
13 Moneys in the Trust Fund shall be expended only in accordance with subsection ( b)
14 of this section and in accordance with limitations and directions enacted by the General
15 Assembly.
16 ( b) Moneys in the Trust Fund for Mental Health, Developmental Disabilities, and
17 Substance Abuse Services and Bridge Funding Needs shall be used only to:
18 ( 1) Provide start- up funds and operating support for programs and services
19 that provide more appropriate and cost- effective community treatment
20 alternatives for individuals currently residing in the State's mental
21 health, developmental disabilities, and substance abuse services
22 institutions.
23 ( 2) Facilitate the State's compliance with the United States Supreme Court
24 decision in Olmstead v. L. C. and E. W.
25 ( 3) Facilitate reform of the mental health, developmental disabilities, and
26 substance abuse services system and expand Expand and enhance
27 mental health, developmental disabilities, and substance abuse
28 treatment and prevention services in these program areas in the
29 community to remove waiting lists and provide appropriate and safe
30 services for clients.
31 ( 4) Provide bridge funding to maintain appropriate client services during
32 transitional periods as a result of facility closings, including
33 departmental restructuring of services.
34 ( 5) Construct, repair, and renovate State mental health, developmental
35 disabilities, and substance abuse services facilities.
36 ( c) Notwithstanding G. S. 143C- 1- 2, any nonrecurring savings in State
37 appropriations realized from the closure of any State psychiatric hospitals that are in
38 excess of the cost of operating and maintaining a new State psychiatric hospital shall not
39 revert to the General Fund but shall be placed in the Trust Fund and shall be used for the
40 purposes authorized in this section. Notwithstanding G. S. 143C- 1- 2, recurring savings
41 realized from the closure of any State psychiatric hospitals shall not revert to the
42 General Fund but shall be credited to the Department of Health and Human Services to
43 be used only for the purposes of subsections ( b)( 1), ( b)( 2) and ( b)( 3) of this section.
43
( d) Beginning 1 July 1, 2007, the Secretary of the Department of Health and
2 Human Services shall report annually to the Fiscal Research Division on the
3 expenditures made during the preceding fiscal year from the Trust Fund. The report
4 shall identify each expenditure by recipient and purpose, shall indicate the authority
under subsection ( b) of this section for the expenditure." 56
7 PART VI. STRENGTHEN THE SERVICES NETWORK
8 SECTION 6.1. The Department of Health and Human Services shall
9 designate four additional local management entities to receive all State allocations
10 through single stream funding. If DHHS has not made the designations by June 1,
11 2007, then the General Assembly shall make the designations.
12 SECTION 6.2. No later than June 1, 2007, the Department of Health and
13 Human Services shall commend the process for three additional local management
14 entities to apply for a 1915( b) Medicaid waiver.
15 SECTION 6.3. The Joint Legislative Oversight Committee for Mental
16 Health, Developmental Disabilities and Substance Abuse Services shall study the
17 effectiveness of the 1915( b) Medicaid waiver and of those LMEs operating under a
18 waiver.
19
20 PART VII. FILLING SERVICE GAPS
21
22 ADDITIONAL MENTAL HEALTH SERVICES
23 SECTION 7.1. There is appropriated from the General Fund to the
24 Department of Health and Human Services, Division of Mental Health, Developmental
25 Disabilities and Substance Abuse Services, the sum of thirty million dollars
26 ($ 30,000,000) for the 2007- 2008 fiscal year, and the sum of thirty million dollars
27 ($ 30,000,000) for the 2008- 2009 fiscal year. The funds shall be used to purchase
28 mental health services. Funds appropriated in this Section shall be allocated to local
29 management entities ( LMEs) such that each LME receives a percentage of the total
30 allocation that is equal to that local management entity's percentage of the State's total
31 population that is below the federal poverty level.
32
33 ADDITIONAL SERVICES FOR THE DEVELOPMENTALLY DISABLED
34 SECTION 7.2. There is appropriated from the General Fund to the
35 Department of Health and Human Services, Division of Mental Health, Developmental
36 Disabilities and Substance Abuse Services, the sum of nine million nine hundred
37 thousand dollars ($ 9,900,000) for the 2007- 2008 fiscal year and the sum of nine million
38 nine hundred thousand dollars ($ 9,900,000) for the 2008- 2009 fiscal year. The funds
39 shall be used to increase the number of individuals who can participate in the
40 Community Alternatives Program for Mental Retardation/ Developmental Disabilities
41 ( CAP MR/ DD).
42 SECTION 7.3. There is appropriated from the General Fund to the
43 Department of Health and Human Services, Division of Mental Health, Developmental
44 Disabilities and Substance Abuse Services, the sum of seven million dollars
44
1 ($ 7,000,000) for the 2007- 2008 fiscal year and the sum of seven million dollars
2 ($ 7,000,000) for the 2008- 2009 fiscal year. The funds shall be used to for start- up and
3 ongoing support of Supported Employment Long- Term Support services.
4 SECTION 7.4. Beginning July 1, 2007, Developmental Therapies services
5 shall only be available to individuals who were receiving that service on June 30, 2007.
6 Developmental Therapy funds that are not utilized shall be made available to LMEs to
7 use for CAP MR/ DD slots or for other Supported Employment Long- Term Support
8 services for the developmentally disabled. An LME that receives all its State
9 appropriated allocations through a grant basis shall also receive its Developmental
10 Therapies allocation on the same basis.
11 The Department of Health and Human Services shall develop a new,
12 Medicaid reimbursable service for submission to the Center for Medicare and Medicaid
13 Services to replace Developmental Therapies no later than November 1, 2007.
14 SECTION 7.5. The Department of Health and Human Services shall
15 develop and apply to the Centers for Medicare and Medicaid Services for additional
16 home and community- based waivers for persons with developmental disabilities. In
17 conjunction with the existing CAP MR/ DD waiver, the new waivers will create a tiered
18 system of services.
19
20 COMMUNITY SUPPORT SERVICES/ TIERED RATE STRUCTURE
21 SECTION 7.6. The Department of Health and Human Services shall
22 establish at least three rate tiers for the service of Community Supports. The rates shall
23 be based upon the level of qualifications of the individuals delivering the service and
24 shall include a professional- level case management tier, a professional- level skill
25 building tier, and a paraprofessional- level tier.
26
27 PART VIII. LME ADMINISTRATIVE FUNDING
28
29 SECTION 8.1. There is appropriated from the General Fund to the
30 Department of Health and Human Services, Division of Mental Health, Developmental
31 Disabilities and Substance Abuse Services, the sum of nineteen million two hundred
32 thousand dollars ($ 19,200,000) for the 2007- 2008 fiscal year and the sum of nineteen
33 million two hundred thousand dollars ($ 19,200,000) for the 2008- 2009 fiscal year to be
34 used to fully fund the LME administrative cost model developed by the Division
35 pursuant to S. L. 2006- 66, Sec. 10.32.( b).
36 Based upon information provided to the General Assembly by the Division, it is the
37 understanding of the General Assembly that the funds appropriated under this Section in
38 addition to the funds contained in the Governor's Base Budget proposal are sufficient to
39 fully fund the State's contribution for LME systems administration as determined by the
40 LME administrative cost model developed under S. L. 2006- 66, Sec. 10.32.( b).
41 Notwithstanding any provision in Chapter 143C of the General Statutes or any other
42 provision of law, the Secretary shall not transfer funds from any other fund code or
43 program category within DHHS to fund LME system administration.
44
45
SECTION 1 8.2. The General Assembly finds that counties have budgeted
2 almost one hundred twenty- one million dollars ($ 121,000,000) to LMEs to pay for
3 mental health, developmental disabilities and substance abuse services. However, the
4 General Assembly lacks information regarding the specific services that are purchased
5 with those county funds. The General Assembly also lacks data regarding the incomes
6 of persons receiving mental health, developmental disabilities and substance abuse
7 services that are paid for by either State or county funds. This lack of data severely
8 limits the General Assembly's ability to determine the distribution of services that are
9 being paid for with public funds, whether persons who are eligible for Medicaid are
10 being enrolled in that program, and whether expanding the State's Medicaid eligibility
11 criteria would impact a significant number of mental health, developmental disabilities
12 and substance abuse service consumers. Therefore, LMEs shall report to the Division
13 all expenditures by the LME for services, start- up expenses, and capital and operational
14 expenditures, regardless of the source of the funds and regardless of whether the funds
15 were earned on a payment for service or grant basis. This reporting shall include
16 specific information regarding the expenditure of all funds provided to the LME by the
17 county or counties contained in the LME's catchment area. To the extent possible, the
18 information shall be submitted through the Integrated Payment and Reimbursement
19 System. LMEs shall also gather income data for all individuals receiving services.
20 There is appropriated from the General Fund to the Department of Health and Human
21 Services, Division of Mental Health, Developmental Disabilities and Substance Abuse
22 Services, the sum of one million seven hundred thousand dollars ($ 1,700,000) for the
23 2007- 2008 fiscal year and the sum of one million seven hundred thousand dollars
24 ($ 1,700,000) for the 2008- 2009 fiscal year to be used by LMEs to pay for the cost of the
25 additional data reporting required under this Section..
26
27 PART IX. EFFECTIVE DATE
28
29 SECTION 9.1. This act becomes effective July 1, 2007.
46
LEGISLATIVE PROPOSAL # 2
UNIFORM SLIDING FEES
47
LEGISLATIVE PROPOSAL # 2
A RECOMMENDATION OF THE LEGISLATIVE OVERSIGHT
COMMITTEE FOR MH/ DD/ SA
TO THE 2007 GENERAL ASSEMBLY
AN ACT TO CREATE A UNIFORM SLIDING FEE
SCHEDULE FOR MH/ DD/ SA SERVICES, AS
RECOMMENDED BY THE JOINT LEGISLATIVE
OVERSIGHT COMMITTEE FORMENTALHEALTH,
DEVELOPMENTALDISABILITIES AND SUBSTANCE
ABUSE SERVICES
Short Title: Uniform Sliding Fees MH/ DD/ SA Services
Brief Overview: This bill would:
1. Direct the Secretary to adopt rules to set a uniform sliding fee schedule.
The fee schedule shall apply to all services paid for with either State of
local funds. Private providers will be required to utilize the schedule.
Amend G. S. 122C- 146 accordingly.
2. Direct DHHS to identify all services that do not have income- related
eligibility requirements.
Effective Date: This bill would become effective when it becomes law and
apply to services provided on or after the fee schedule is adopted.
A copy of the proposed legislation begins on the next page
48
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2007
U D
BILL DRAFT 2007- RCfz- 5 [ v. 3] ( 02/ 23)
( THIS IS A DRAFT AND IS NOT READY FOR INTRODUCTION)
3/ 2/ 2007 1: 47: 55 PM
Short Title: Uniform Sliding Fees - MH/ DD/ SA Services. ( Public)
Sponsors: .
Referred to:
1
2 A BILL TO BE ENTITLED
3 AN ACT TO CREATE A UNIFORM SLIDING FEE SCHEDULE FOR MH/ DD/ SA
4 SERVICES AS RECOMMENDED BY THE JOINT LEGISLATIVE OVERSIGHT
5 COMMITTEE FOR MENTAL HEALTH, DEVELOPMENTAL DISABILITIES
AND SUBSTANCE ABUSE SERVICES. 67
8 The General Assembly of North Carolina enacts:
9 SECTION 1. G. S. 122C- 146 reads as rewritten:
10 " § 122C- 146. Fee for service.
11 ( a) The area authorityLME and its contractual provider agencies shall prepare fee
12 schedules implement the standardized fee schedule and sliding fee schedule adopted by
13 the Secretary for services and under G. S. 122C- 112.1( a). The LME and its contractual
14 provider agencies shall also make every reasonable effort to collect appropriate
15 reimbursement for costs in providing these services from individuals or entities able to
16 pay, including insurance and third- party payment, except that individuals However, no
17 individual may be refused services because of an inability to pay.
18 ( b) Individuals may not be charged for free services, as required in " The
19 Amendments to the Education of the Handicapped Act", P. L. 99- 457, provided to
20 eligible infants and toddlers and their families. This exemption from charges does not
21 exempt insurers or other third- party payors from being charged for payment for these
22 services, if the person who is legally responsible for any eligible infant or toddler is first
23 advised that the person may or may not grant permission for the insurer or other payor
24 to be billed for the free services. However, no individual may be refused services
25 because of an inability to pay.
26 ( c) All funds collected from fees from area authorityLME operated services shall
27 be used for the fiscal operation or capital improvements of the area authority'sLME's
49
programs. The 1 collection of fees by an area authorityLME may not be used as
2 justification for reduction or replacement of the budgeted commitment of local tax
3 revenue. All funds collected from fees by contractual provider agencies shall be used to
4 provide services to individuals in targeted populations."
5 SECTION 2. 122C- 112.1( a) is amended by adding a new subdivision to
6 read:
7 " § 122C- 112.1. Powers and duties of the Secretary.
8 ( a) The Secretary shall do all of the following:
9 . . .
10 ( 34) Adopt rules to implement a standard fee schedule and sliding fee
11 schedule to be used by LMEs and by contractual provider agencies
12 under G. S. 122C- 146."
13 SECTION 3. The Secretary of the Department of Health and Human
14 Services shall identify all services that are funded by or through the Department's
15 budget and that do not require income- based criteria in order for an individual to be
16 eligible to receive the service. The Secretary shall develop a proposal for implementing
17 income- based criteria for eligibility for those programs and shall submit the proposal to
18 the General Assembly and the Fiscal Research Division by November 1, 2007.
19 SECTION 4. This act is effective when it becomes law and applies to
20 services provided on or after the effective date of the rules adopted by the Secretary
21 under Section 2 of this act.
22
50
LEGISLATIVE PROPOSAL # 3
EXTEND PILOT/ CLARIFY LME FUNCTIONS
51
LEGISLATIVE PROPOSAL # 3
A RECOMMENDATION OF THE LEGISLATIVE OVERSIGHT COMMITTEE FOR
MH/ DD/ SA
TO THE 2007 GENERAL ASSEMBLY
AN ACT TO EXTEND THE FIRST COMMITMENT PILOT
PROGRAMAND TO FURTHER CLARIFY LME CORE
FUNCTIONS, AND TO ALLOWADDITIONAL TIME FOR AN
LME TO MERGE WHEN IT HAS GONE BELOWTHE 200,000
POPULATION OR SIX COUNTY THRESHOLD DUE TO A
CHANGE IN COUNTY MEMBERSHIP AS RECOMMENDED BY
THE JOINT LEGISLATIVE OVERSIGHT COMMITTEE ON
MENTAL HEALTH, DEVELOPMENTAL DISABILITIES AND
SUBSTANCE ABUSE SERVICES.
Short Title: Extend Pilot/ Clarify LME Functions MH/ DD/ SA
Brief Overview: This bill would:
1. First Commitment Pilot Program Reauthorizes the pilot program and adds
five additional LMEs.
2. Clarify Screening / Triage/ Referral Rolls Amends G. S. 122C- 115.4( b) to clarify
that only LMEs are authorized to conduct the core LME functions.
3. LME Size Requirements Amends G. S. 122C- 115( a1) to allow that an LME that
does not comply with the catchment area requirements because of a change in
county membership has 12 months from the effective date of the change to
comply with LME size requirements.
Effective Date: The act would be effective when it becomes law.
A copy of the proposed legislation begins on the next page
52
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2007
U D
BILL DRAFT 2007- RCz- 6 [ v. 6] ( 02/ 23)
( THIS IS A DRAFT AND IS NOT READY FOR INTRODUCTION)
3/ 7/ 2007 3: 51: 58 PM
Short Title: Extend Pilot/ Clarify LME Functions/ LME Admin. ( Public)
Sponsors: .
Referred to:
A BILL TO BE ENTITLED
AN ACT TO EXTEND THE FIRST COMMITMENT PILOT PROGRAM, TO
FURTHER CLARIFY LME CORE FUNCTIONS AND TO ALLOW
ADDITIONAL TIME FOR AN LME TO MERGE WHEN IT HAS GONE BELOW
THE 200,000 POPULATION OR SIX COUNTY THRESHOLD DUE TO A
CHANGE IN COUNTY MEMBERSHIP AS RECOMMENDED BY THE JOINT
LEGISLATIVE OVERSIGHT COMMITTEE ON MENTAL HEALTH,
DEVELOPMENTAL DISABILITIES AND SUBSTANCE ABUSE SERVICES.
The General Assembly of North Carolina enacts:
SECTION 1.( a). S. L. 2003- 178, as amended by S. L. 2006- 66, Section 10.27,
reads as rewritten:
" SECTION 1. The Secretary of Health and Human Services may, upon request of a
phase- one local management entitya LME, waive temporarily the requirements of
G. S. 122C- 261 through G. S. 122C- 263 and G. S. 122C- 281 through G. S. 122C- 283
pertaining to initial ( first- level) examinations by a physician or eligible psychologist of
individuals meeting the criteria of G. S. 122C- 261( a) or G. S. 122C- 281( a), as applicable,
as follows:
( 1) The Secretary has received a request from a phase- one local
management entityan LME to substitute for a physician or eligible
psychologist, a licensed clinical social worker, a masters level
psychiatric nurse, or a masters level certified clinical addictions
specialist to conduct the initial ( first- level) examinations of individuals
meeting the criteria of G. S. 122C- 261( a) or G. S. 122C- 281( a). The
waiver shall be implemented on a pilot- program basis. The request
from the local management entityLME shall be submitted as part of the
entity's local business plan and shall specifically describe:
a. How the purpose of the statutory requirement would be better
served by waiving the requirement and substituting the
proposed change under the waiver.
53
b. How the waiver will enable the local management entityLME to
improve the delivery or management of mental health,
developmental disabilities, and substance abuse services.
c. How the services to be provided by the licensed clinical social
worker, the masters level psychiatric nurse, or the masters level
certified clinical addictions specialist under the waiver are
within each of these professional's scope of practice.
d. How the health, safety, and welfare of individuals will continue
to be at least as well protected under the waiver as under the
statutory requirement.
( 2) The Secretary shall review the request and may approve it upon
finding that:
a. The request meets the requirements of this section.
b. The request furthers the purposes of State policy under
G. S. 122C- 2 and mental health, developmental disabilities, and
substance abuse services reform.
c. The request improves the delivery of mental health,
developmental disabilities, and substance abuse services in the
counties affected by the waiver and also protects the health,
safety, and welfare of individuals receiving these services.
d. The duties and responsibilities performed by the licensed
clinical social worker, the masters level psychiatric nurse, or the
masters level certified clinical addictions specialist are within
the individual's scope of practice.
( 3) The Secretary shall evaluate the effectiveness, quality, and efficiency
of mental health, developmental disabilities, and substance abuse
services and protection of health, safety, and welfare under the waiver.
The Secretary shall send a report on the evaluation to the Joint
Legislative Oversight Committee on Mental Health, Developmental
Disabilities, and Substances Abuse Services on or before July 1, 2006.
by October 1, 2009. The report shall include data gathered from all
participating LMEs since the beginning of the pilot.
( 4) The waiver granted by the Secretary under this section shall be in
effect until October 1, 2007. 2010.
( 5) The Secretary may grant a waiver under this section to up to five ten
local management entities that have been designated as phase- one
entities as of July 1, 2003. LMEs
( 6) In no event shall the substitution of a licensed clinical social worker,
masters level psychiatric nurse, or masters level certified clinical
addictions specialist under a waiver granted under this section be
construed as authorization to expand the scope of practice of the
licensed clinical social worker, the masters level psychiatric nurse, or
the masters level certified clinical addictions specialist.
( 7) The Department shall assure that staff performing the duties are trained
and privileged to perform the functions identified in the waiver. The
Department shall involve stakeholders including, but not limited to, the
North Carolina Psychiatric Association, The North Carolina Nurses
Association, National Association of Social Workers, The North
Carolina Substance Abuse Professional Certification Board, North
Carolina Psychological Association, The North Carolina Society for
Clinical Social Work, and the North Carolina Medical Society in
developing required staff competencies.
54
( 8) The local management entityLME shall assure that a physician is
available at all times to provide backup support to include telephone
consultation and face- to- face evaluation, if necessary.
SECTION 2. This act becomes effective July 1, 2003, and expires October 1, 2007.
2010."
SECTION 1.( b). The Joint Legislative Oversight Committee for Mental
Health, Developmental Disabilities, and Substance Abuse Services ( LOC) shall review
the report submitted by the Secretary under S. L. 2003- 178, as amended by S. L. 2006- 66,
Section 10.27 and Section 1.( b) of this act. The LOC shall make recommendations to
the 2011 General Assembly regarding whether to further extend the pilot or make it
permanent and state wide.
SECTION 2. G. S. 122C- 115.4 reads as rewritten
" § 122C- 115.4. Functions of local management entities.
( a) Local management entities are responsible for the management and oversight
of the public system of mental health, developmental disabilities, and substance abuse
services at the community level. An LME shall plan, develop, implement, and monitor
services within a specified geographic area to ensure expected outcomes for consumers
within available resources.
( b) The primary functions of an LME are designated in this subsection and shall
not be conducted by any other entity unless an LME voluntarily enters into a contract
with that entity under subsection ( c) of this section. The primary functions include all of
the following:
( 1) Access for all citizens to the core services described in G. S. 122C- 2. In
particular, this shall include the implementation of a 24- hour a day,
seven- day a week screening, triage, and referral process and a uniform
portal of entry into care.
( 2) Provider endorsement, monitoring, technical assistance, capacity
development, and quality control. An LME may remove a provider's
endorsement if a provider fails to meet defined quality criteria or fails
to provide required data to the LME.
( 3) Utilization management, utilization review, and determination of the
appropriate level and intensity of services including the review and
approval of the person centered plans for consumers who receive
State- funded services. Concurrent review of person centered plans for
all consumers in the LME's catchment area who receive Medicaid
funded services.
( 4) Authorization of the utilization of State psychiatric hospitals and other
State facilities. Authorization of eligibility determination requests for
recipients under a CAP- MR/ DD waiver.
( 5) Care coordination and quality management. This function includes the
direct monitoring of the effectiveness of person centered plans. It also
includes the initiation of and participation in the development of
required modifications to the plans for high risk and high cost
consumers in order to achieve better client outcomes or equivalent
55
outcomes in a more cost- effective manner. Monitoring effectiveness
includes reviewing client outcomes data supplied by the provider,
direct contact with consumers, and review of consumer charts.
( 6) Community collaboration and consumer affairs including a process to
protect consumer rights, an appeals process, and support of an effective
consumer and family advisory committee.
( 7) Financial management and accountability for the use of State and local
funds and information management for the delivery of publicly funded
services.
( c) Subject to subsection ( b) of this section and all applicable State and federal
laws and rules established by the Secretary, an area authority, or county program or
consolidated human services agency LME may contract with a public or private entity
for the implementation of LME functions articulated designated under subsection ( b) of
this section. Nothing in this subsection shall be construed to supercede the authority of
an LME to be the sole entity with the authority to implement the functions designated in
subsection ( b) of this section.
( d) Except as provided in G. S. 122C- 142.1 and G. S. 122C- 125, the Secretary
may not remove from an LME or designate another entity as also eligible to implement
any function enumerated under subsection ( b) of this section unless all of the following
applies:
( 1) The LME fails during the previous three months to achieve a
satisfactory outcome on any of the critical performance measures
developed by the Secretary under G. S. 122C- 112.1( 33).
( 2) The Secretary provides focused technical assistance to the LME in the
implementation of the function. The assistance shall continue for at
least six months or until the LME achieves a satisfactory outcome on
the performance measure, whichever occurs first.
( 3) If, after six months of receiving technical assistance from the
Secretary, the LME still fails to achieve or maintain a satisfactory
outcome on the critical performance measure, the Secretary shall enter
into a contract with another LME or agency to implement the function
on behalf of the LME from which the function has been removed.
( e) Notwithstanding subsection ( d) of this section, in the case of serious financial
mismanagement or serious regulatory noncompliance, the Secretary may temporarily
remove an LME function after consultation with the Joint Legislative Oversight
Committee on Mental Health, Developmental Disabilities, and Substance Abuse
Services.
( f) The Commission shall adopt rules regarding the following matters:
( 1) The definition of a high risk consumer. Until such time as the
Commission adopts a rule under this subdivision, a high risk consumer
means a person who has been assessed as needing emergent crisis
services three or more times in the previous 12 months.
56
( 2) The definition of a high cost consumer. Until such time as the
Commission adopts a rule under this subdivision, a high cost consumer
means a person whose treatment plan is expected to incur costs in the
top twenty percent ( 20%) of expenditures for all consumers in a
disability group.
( 3) The notice and procedural requirements for removing one or more
LME functions under subsection ( d) of this section."
SECTION 3. G. S. 122C- 115( a1) reads as rewritten:
"( a1) Effective July 1, 2007, The the Department of Health and Human Services
shall reduce by ten percent ( 10%) annually the administrative funding for area
authorities and county programs LMEs that do not comply with the catchment area
requirements of this section. subsection ( a) of this section. However, an LME that does
not comply with the catchment area requirements because of a change in county
membership shall have twelve months from the effective date of the change to comply
with subsection ( a) of this section."
SECTION 4. This act is effective when it becomes law.
57